ABN: what is an Australian Business Number and when do I need one?

Anyone who has set up a business or decided to go it alone as a sole trader knows that there can be a seemingly endless pile of paperwork and forms to fill out, and it can be tempting to skip over or delay what you can.

Registering for an Australian Business Number (ABN) is quick and easy to do – and there are some very good reasons to get on to it right away.

Here’s what you need to know about getting an ABN and why it should be a priority for business operators and sole traders.

What is an Australian Business Number (ABN)?

An Australian Business Number is a single identifying number, which is used by businesses to interact with government departments and agencies.

ABNs form what’s known as the Australian Business Register (ABR), a database managed by the Australian tax department on behalf of the Commonwealth Government.

When do I need to get an ABN?

If your business has an annual turnover of $75,000 or more, you are required by law to get an Australian Business Number.

Businesses with an annual income of less than $75,000 are not required to have an ABN – but there are good reasons why they should.

If you don’t have an ABN, other businesses that deal with you must withhold tax from any payments they make to you – and at a rate of 47 per cent, that’s a big incentive.

Having an ABN also allows your business to register to claim back GST credits, claim fuel tax credits if you qualify, register to use the pay-as-you-go withholding system, and be able to offer fringe benefits to employees, as well as other advantages.

Having an Australian Business Number generally makes dealing with government agencies and other businesses so much easier.

How do I apply for an ABN?

The ABN registration process is managed by the Australian Business Register.

Applying is as simple as filling out an online application form on their website, which takes only a few minutes to complete.

How much does it cost to get an ABN?

It’s absolutely free to set up an ABN.

However, while the government imposes no fee, there may be a fee attached by an accountant or business manager if you get them to set it up for you.

How long does it take to get an ABN?

In most cases, an ABN will be issued immediately on completion of the registration form. However, if there is information missing, or information that is unable to be verified, the application will need to be processed manually and this can take up to 28 days.

You can track the progress of your ABN registration online throughout the process.

Can I use the same ABN for multiple businesses?

It all depends on your businesses and how they are structured.

If you have several businesses, all operating under identical structures, then you can use the same ABN.

If the operations and structure of your businesses differ, they will each require individual ABNs.

Get business advice from the experts at LDB Group

LDB Group can offer tax guidance and business advice across all aspects of operating a business or setting up as a sole trader.

To find out how we can help you, call (03) 9875 2900 or send us information via the contact form below to find out more.