What is an Australian Business Number (ABN) and why do you need it?

Let’s talk about the importance of the Australian Business Number (ABN) and why business owners and sole traders should make getting one a top priority.

In order to communicate with government departments and agencies, firms must have an Australian Business Number (ABN). The Australian Tax Department in Australia maintains the Australian Business Register (ABR), a database that includes ABNs on behalf of the Commonwealth Government.


If your company has an annual turnover of $75,000 or more as a business owner or sole proprietor, you must obtain an ABN as it is a legal obligation. There are strong reasons to think about having an ABN even if your business only generates $75,000 or less in annual revenue.

There are a number of benefits to having an ABN, including:

Tax withholding: If you don’t have an ABN, other companies who do business with you are required to deduct tax at a rate of 47% from any payments they make to you. Having an ABN can help you prevent this hefty withholding.

GST Credits: Having an ABN enables your company to register and claim back Goods and Services Tax (GST) credits, which is advantageous for controlling expenses and cash flow.

Fuel Tax Credits: Companies that meet the requirements can apply for fuel tax credits, which can result in fuel budget reductions.


Pay-As-You-Go Withholding: Your company can sign up to use the pay-as-you-go withholding system with an ABN, which makes tax duties for employee payments simpler.

Fringe Benefits: With an ABN, your company is allowed to provide employees with fringe benefits, which can be a desirable incentive for staff retention and motivation.

Additionally, dealing with government organisations and other businesses is made much simpler with an ABN, reducing administrative procedures and enhancing communication.

The Australian Business Register manages the simple application process for an ABN. On their website, you may easily fill out an online application form, and in most circumstances, the ABN will be sent right away. However, the application may take up to 28 days to be processed manually if any information is missing or cannot be validated.


The best thing is that there are no costs associated with establishing an ABN because there are none levied by the government. If you prefer to have an accountant or business manager set up the ABN for you, they might charge a fee.

Using the same ABN for several firms depends on how your enterprises are set up, so be sure to check that out. You may use a single ABN if your several enterprises all operate under the same framework. Each firm will need a unique ABN if their operations and organisational setups differ.

Conclusion: For business owners and sole proprietors, obtaining an Australian Business Number is essential since it not only satisfies legal requirements but also opens up a number of financial and administrative benefits for more efficient business operations.