Do You Need an ABN? Who Needs One & How to Apply Fast (2025-2026 Guide)
Many new business owners in Australia ask the same question: “Do I need an ABN?” An ABN (Australian Business Number) is an 11-digit number that identifies your business with the Australian Government. The ATO and other government bodies use it to track tax, GST, and business activity.
In this simple guide, you will learn:
– Who needs an ABN
– When an ABN is required
– When you do not need an ABN
– Why having an ABN matters
– How to get an ABN fast and avoid delays
This guide applies to small businesses, students, freelancers, tradies, online sellers, and new companies in Adelaide, Melbourne, Sydney, Perth, Brisbane, Canberra, Darwin, and Tasmania.
1. What Is an ABN?
An ABN is a unique number for your business. The Australian Taxation Office (ATO) states that an ABN helps identify your business and makes it easier to interact with government departments. You use an ABN for:
– invoicing
– registering a business name
– claiming GST credits
– applying for licenses
– dealing with suppliers
– getting paid by clients
Without an ABN, many businesses cannot operate properly.
1. What Is an ABN?
An ABN is a unique number for your business. The Australian Taxation Office (ATO) states that an ABN helps identify your business and makes it easier to interact with government departments. You use an ABN for:
– invoicing
– registering a business name
– claiming GST credits
– applying for licenses
– dealing with suppliers
– getting paid by clients
Without an ABN, many businesses cannot operate properly.
2. Who Needs an ABN?
According to the ATO, you need an ABN if you run an enterprise. An enterprise includes:
Sole traders
If you run your own business, such as:
– freelance work
– cleaning
– tutoring
– driving
– photography
– web design
– trades
you need an ABN.
Small businesses
Any business that sells goods or services for profit needs an ABN.
Companies (Pty Ltd)
Every company in Australia must have an ABN to operate.
Partnerships and trusts
These structures need an ABN under ATO rules.
Online sellers
If you regularly sell items for profit on:
– Facebook Marketplace
– eBay
– Amazon
– Etsy
– Shopify
you need an ABN because you are running a business.
Contractors and tradies
The ATO states that contractors must have an ABN to avoid PAYG withholding. If you do not provide an ABN, businesses must withhold 47% from your payments. This is the ATO’s rule for suppliers without an ABN: tax withheld at the highest tax rate.
3. Who Does NOT Need an ABN?
You do not need an ABN if you are doing a hobby, not a business.
You sell something only once or twice for personal use.
You are employed and earn wages; employment income does not need an ABN.
You do not plan to make a profit.
Example: Selling your old phone on Marketplace means you don’t need an ABN. Buying items to resell for profit means you do need an ABN. The ATO states that the main test is whether you plan to run a business and earn regular income.
4. Why You Should Have an ABN?
1. You avoid 47% tax withholding.
If you send an invoice without an ABN, the customer must withhold 47% and send that to the ATO.
2. You can register a business name.
ASIC requires an ABN to register or renew a business name.
3. You can claim business expenses.
You can claim work-related costs against your income when you file your tax return.
4. You can register for GST when needed.
If your turnover is $75,000 or more per year, you must register for GST. You cannot register for GST without an ABN.
5. You look more professional.
Most clients prefer working with someone who has an ABN.
6. Faster payments.
Many companies do not pay invoices that do not include an ABN.
5. When Do You Need an ABN for GST?
The ATO requires businesses to register for GST if:
your turnover is $75,000 or more.
your non-profit turnover is $150,000 or more.
you work as an Uber, Ola, or ride-share driver; registration for GST is mandatory.
You must have an ABN to register for GST.
6. How to Get an ABN Fast?
The ABN application goes through the Australian Business Register (ABR). However, many people get rejected because they choose the wrong business structure, enter the wrong business activity, apply too early (before starting activity), or provide incorrect TFN details.
ATO data shows that thousands of ABN applications are refused each year because the applicant cannot prove they are starting a real business. To avoid delays, a registered tax agent like AMA Accountants can check your eligibility and submit your application correctly.
What AMA Accountants helps with:
– choosing the right structure
– preparing your ABN application
– linking TFN, GST, and PAYG
– explaining your business activity in ATO-approved terms
– helping you stay compliant after your ABN is active
7. How Long Does ABN Approval Take?
If your details are correct, the ABR states that an ABN can be issued right away. If the ATO needs more information, it may take up to 28 days. Most delays occur when:
– information is incomplete
– the business activity is unclear
– the applicant is not truly “carrying on a business”
– the TFN does not match ATO records
A tax agent can lower the risk of delays or rejection.
8. Final Advice
If you earn money from your own work, freelancing, selling, or running a small business, you likely need an ABN. It protects you from 47% withholding and helps you comply with ATO rules. AMA Accountants can help you get your ABN quickly, avoid delays, and set up your GST and PAYG if necessary.
Need an ABN fast?
AMA Accountants can register your ABN correctly the first time. We help clients in Adelaide, Melbourne, Perth, Sydney, Brisbane, Canberra, Darwin, and Tasmania. Book your ABN registration with AMA Accountants today.
📞 +61 (0)420 529 890
📧 finance@amaaccountant.com.au
Authored By Amit Chugh
Partner, CPA & Registered Tax Agent
Your Trusted Accountant for Adelaide, Melbourne, Sydney, Brisbane & Across Australia
Amit Chugh is a Partner at The AMA Accountant and a highly respected CPA & Registered Tax Agent with a proven track record of delivering exceptional accounting and taxation services to individuals, businesses, and corporations across Australia.
Amit Chugh is a Partner at The AMA Accountant and a highly respected CPA & Registered Tax Agent with a proven track record of delivering exceptional accounting and taxation services to individuals, businesses, and corporations across Australia.
With over 25+ of professional experience, Amit has helped thousands of clients streamline their finances, optimise tax returns, and ensure full compliance with Australian Taxation Office (ATO) requirements. His client base spans Melbourne, Brisbane, Sydney, Tasmania, Perth, Adelaide, Darwin, Canberra, and regional hubs including Prospect, Modbury, Mawson Lakes, Woodville, Mount Gambier, Victor Harbor, Whyalla, Port Lincoln, Murray Bridge, Port Augusta, Gawler, and Port Pirie.
