An Australian Business Number (ABN) is a fancy series of digits for Australian business owners. Okay, maybe it’s not that fancy, but it is both crucial and necessary.
If you own a business, you’re required to have an ABN by the government so that you can show customers, clients and other businesses that you are indeed registered and legitimate.
Having an ABN allows you to be identified by important government agencies like the ATO for tax purposes, or the ABR, which stores all of your business information for anyone who might need to look it up (like you – remember when your laptop died and never woke up?).
What are ABNs used for?
The most common way you will use your ABN is for invoicing. Placing that important number on the document that you use to request payment from clients or customers ensures that they can cross-check your business as one that is real and absolutely not a scam.
It will sit in the section where you pop all your key info: personal name, business name (if you have one), business address, bank details and so on.
Do sole traders need ABNs?
Short answer: sometimes (helpful, we know).
If you’re set to make over $75k of self-employed income in a 12-month period, you’ll need to register for GST. In order to register for GST, you need an ABN. This is pretty much the only situation where you’re required to have an ABN.
But even if you don’t need to register for GST, having an ABN is still useful! Firstly, it makes you instantly recognisable as a legitimate business. You’ll be searchable in the Australian Business Register (ABR), and it’ll be easier to deal with government agencies.
Secondly (and this is the real kicker), if you freelance for a business, charge them more than $75, and you don’t provide them with an ABN, they’re technically required to withhold tax from your payments at the top income tax rate. Yikes.
How do you get an ABN?
Registering for an ABN is simple, free and doesn’t take much time at all. You can do this via the ABR site and it takes about 30 minutes max. You’ll need the following info at your disposal before you get cracking:
- Your TFN
- The date your business will be launching (most likely tomorrow’s date because you’re totally gonna take a nap after this)
- Personal details like your full name, email, phone number, address, yadda yadda yadda
- The name of your business and what it will do (provide electrical services or sell beauty products)
- Any business locations you will be operating from
That’s ABNs in a nutshell folks, but if you’re after more information, check out our detailed guides on ABNs and sole trader businesses:
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