Tax File Numbers (TFN) and Australian Business Numbers (ABN)

Working in Australia

If you’re starting a job in Australia for the first time, it’s important you get a Tax File Number or Australian Business Number to avoid being overtaxed, and to make sure you don’t miss out on any superannuation (pension contributions) during the course of your employment.

What is a Tax File Number (TFN)?

A Tax File Number or TFN is a nine-digit number that providers use to identify your tax status, like national insurance number in the UK or PPS in Ireland. If you’re a foreign resident (working in, but not originally from Australia) you’ll be taxed at 32.5% of your earnings for the first six months of your stay in Australia. If you stay for longer than six months you start to be recognized as a resident for tax purposes and can be reimbursed.

An Australian Tax File Number (TFN) will enable you to:

  • Open a bank account
  • Pay the correct rate of tax (prevents you from paying emergency tax)
  • Change jobs easily
  • Apply for any applicable government benefits
  • Join a superannuation fund
  • File a tax return
  • Claim a tax refund

Your TFN is:

  • an important part of your tax and super records
  • an important part of your identity – make sure you keep it secure
  • yours for life, even if you change your name, change jobs, move interstate or go overseas.

If you don’t supply your employer with your personal TFN within the first 30 days of your employment, you could be subject to emergency tax ON TOP OF the 32.5% you’re already paying as a foreign resident – which means around 45% of your earnings would be withheld as tax!

How to apply for a TFN?

DUC have recently partnered with Taxback.com, to help sort you out with a Tax File Number quickly and easily even before you get to Australia, for just $30 AUD – so you have one less thing to worry about when you get there. It only takes a few minutes to submit your details via the short online application here . You will then receive a quick call and email with further instructions. *Application fee of $30 applies up front.

Please have in mind that you could only apply for a Tax File Number once you enter Australia! Taxback.com can prepare your TFN application prior to your arrival in the country and submit it to the Australian Tax Office (ATO) as soon as you land onshore. Standard processing time for TFN to be issued is 28 days. You are able to start work right away and inform your employer you have already applied for a TFN and will supply such as soon as issued!

What is an Australian Business Number (ABN)?

An ABN is a unique 11-digit number assigned to businesses by the Australian Business Register (ABR). All self-employed taxpayers are required to have an ABN and quote it on invoices for work performed. Common examples of occupations where an ABN might be required are trades such as carpentry, fundraising, and personal training. An ABN is used for:

  • Correspondence with the tax office
  • Dealing with government agencies
  • Transactions with other businesses
  • Confirming details for ordering and invoicing with other businesses
  • Claiming goods and services tax (GST) credits
  • Claiming any fuel tax credits you qualify for

Why do I need one?

If you plan to start a freelance job in Australia or are required to work as a self-employed person in Australia, you will be required to apply for an ABN. Please note that individuals who apply for an ABN should have a personal TFN issued prior to application.

Where there is an ABN, tax is not taken at source, the person raising the invoice and receiving the payment is receiving full payment for products or services so a portion of that income should be retained to meet the tax liability at the end of the financial year.

You’re entitled to an ABN if all of the following statements are true:

  • Your activity is carried out in the:
    • Form of a business
    • Nature of a trade
    • Form of a regular or continuous grant of a lease, licence or interest in property
  • Your activity is carried out in Australia or you make supplies connected with Australia.
  • You have a reasonable expectation that a profit will be made from your activity.

Failure to quote an ABN can result in as much as 46% being withheld from payments from other companies so it’s very risky not to have one.

Furthermore, if a company does not provide an ABN when doing business with another company, this may result in payment for goods being withheld.

Is an ABN the same as a TFN?

No. A TFN is your personal number for dealings with the Australian Tax Office (ATO) and an ABN, whilst ‘attached’ to your TFN on ATO systems, is a public number used in business dealings.

How to apply for an ABN?

Taxback.com can help you apply for an ABN and take care of the paperwork for you, for $100 AUD. Submit your details to start your application here. Turnaround time for ABN to be issued is 14 days. *Application fee of $100 applies up front.

Please note that ABN does not replace a TFN and will not cover all your dealings with the ATO. For example, you will still need to quote your TFN when lodging your income tax returns. The combined fee for a paper file TFN and ABN is $130. Taxback.com can organise both for you and take care of your income tax after the end of the financial year and your superannuation claim when departing Australia.