If you're planning to sell goods or services in Australia, you will need an Australian Business Number (ABN). Whether you're a freelancer or sole trader, itβs essential to understand ABN requirements so your business can operate legally.
Here, weβll explain what an ABN is and how it works. Weβll also explain where to display your ABN and how to update or cancel your ABN.
An ABN is a unique 11-digit number that identifies your business to the government and other organisations. Think of it as your business's official ID.Β
An ABN can be used to:
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Freelancers, contractors, and other business owners typically need an ABN.
If youβre unsure whether your activity qualifies as a business, ask yourself:
If you answered yes to any of these, you are probably running a business and need an ABN.Β
If youβre confused about what type of business you operate and your tax obligations, head over to this guide by the Australian Tax Office (ATO).
From simplifying tax time to boosting your professional credibility, hereβs how an ABN can benefit your business:
Getting an ABN from the Australian Tax Office (ATO) is straightforward for freelancers and sole traders, but you'll need to have a few things organised before you apply:
Not comfortable doing it yourself? A registered tax agent can handle the whole process for you.
Once you receive your ABN, you should add it to your business documents, especially invoices. Usually, an ABN is placed at the top or bottom margin, alongside your contact details. Accounting software like QuickBooks Online makes it easy to add your ABN to your estimates, invoices, and sales receipt templates.
Itβs important to keep your ABN details current to stay compliant with legal and tax obligations.
An ABN should be updated whenever your business details change. The number will remain the same, but it will be associated with your new details. You should update your ABN if you are changing your business name, address, contact details, ownership, or structure.
If you stop freelancing and no longer need your ABN, you need to cancel it. Likewise, if you're closing your business, you should cancel your ABN through the Australian Business Register β just make sure you've settled any outstanding debts first. Owing taxes is one of the more common debts that might need to be settled.
Itβs easy to be confused about ABNs and ACNs (Australian Company Numbers) β they come from different organisations and serve different purposes.
The Australian Securities and Investments Commission (ASIC) handles ACNs, while the Australian Business Register manages ABNs.Β Freelancers, sole traders, and most businesses only need an ABN (11 digits) β not an ACN. However, youβll need both if you're running a company, starting with the ACN.
Getting an ABN is a crucial step in setting up your Australian business. An ABN is more than a compliance requirement β it makes it easier to conduct business smoothly and professionally. Once you've got your ABN from the Australian Tax Office, you can focus on what really matters: growing your business.
More information can be found in our guides to starting a business and becoming a freelance accountant.
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