Tax registrations

The registrations required by the ATO for your business will vary depending on your business structure and operations. The four most common registrations required by small businesses are outlined below.

Tax File Number (TFN)

A tax file number (TFN) is a unique nine-digit number the ATO issues to individuals and organisations.

Your business will usually need its own TFN, unless you are a sole trader – then you can use your personal TFN. A partnership, company, or trust must apply for a separate TFN in addition to the individual TFNs of the owners of the business.

If you don’t have a TFN, you may have to pay tax at the highest rate, no matter what your income is. (Most people don’t pay tax at the highest rate).

You can get a TFN when you apply for an ABN.

Learn more at the ATO website:

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Australian Business Number (ABN)

To get an ABN:

  • apply online through the Australian Business Register
  • call the ATO on 13 92 26, or
  • apply through a registered tax agent who will lodge an application for you.

An Australian business number (ABN) is the number your business uses when you deal with other businesses, government, and the ATO.

You must have an Australian business number (ABN) to be part of the GST system, so if you don’t already have an ABN you can register for that and the GST in the same application. (If you register online, you will receive your ABN immediately as long as you are able to provide all the information the ATO asks for – plus proof of your identity.)

It is not compulsory to register for an ABN but if you don’t have your ABN on invoices, other businesses will take tax from any payments they make to you at the top tax rate.

Learn more at the ATO website:

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Goods and Services Tax (GST)

Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.

You must register for GST if:

  • the current or projected turnover of your business is $75,000 or more;
  • you are a taxi driver, provide limousine or hire car services; or
  • you wish to claim fuel tax credits.

You may choose to register for GST even if your turnover has not reached the $75,000 threshold ($6,250 per month). The advantages of being registered for GST:

  • You can claim GST credits for any GST you have paid on goods and services you have used in your business.
  • Once registered there is no need to continually monitor your turnover. As soon as you reach the threshold, you must register for GST within 21 days otherwise you may be liable for GST on sales even if you did not charge GST on those sales, which means you could possibly lose a percentage of your sales income.
  • It eliminates the risk of alienating clients with an unexpected price rise. To maintain your net profit margins, you will need to increase your prices by 10% to cover the GST when your turnover reaches the threshold. Some price sensitive clients may react negatively to this price rise.

Learn more at the ATO website:

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Pay as you go (PAYG) withholding

When you pay employees or contractors, you may need to withhold tax from their pay and send these amounts to the ATO regularly.

PAYG withholding is the ATO system for ensuring employees and businesses can meet their end-of-year tax liabilities. These include:

  • payments you make as an employer to employees, company directors and office holders;
    (note: personal drawings are not considered a wage and sole traders and partnerships are not required to withhold amounts from these drawings. You may make provision for your income tax liability through the PAYG instalments system or consider a separate savings account.)
  • payments under labour hire arrangements;
  • payments under voluntary agreements; and
  • payments to businesses that do not quote their ABN.

You must apply to register for PAYG withholding by the day on which you are first required to withhold an amount from a payment.

How to apply for registration

If you don’t already have an ABN, you can register for PAYG withholding online through the Australian Business Register at the same time as you apply for an ABN, using the same form.

If you have an ABN, you can register for PAYG withholding:

  • online through the ATO Business Portal (you will need an AUSkey)
  • online through the Australian Business Register (you will need an AUSkey)
  • by phoning 13 28 66
  • by completing add a new business account – send your completed form to the address shown on the form
  • through your tax advisor – your accountant or tax agent may charge a fee to assist you with registration, whereas there is no cost to apply for any registration required by the ATO.

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What’s next…

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Related Information

Top Tips

  1. Call 13 12 49 or email us to speak with a specialist small business adviser – or visit us and make the most of our one-stop service.

  2. We provide a one-stop service for all the business information you need to get your business off to the right start, as well as IBISWorld – an excellent industry and market research resource that covers more than 500 industries in Australia’s economy.

  3. Whether you need help to get started in business (or later on) the ATO provides a wide variety of assistance to support you.

  4. Watch the ATO tax basics videos for small business

  5. Take charge of your finances with the help of our step-by-step workshop Understanding Your Business Financials

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