You're entitled to an ABN if you're either:
You should ensure you're entitled to an ABN before you apply. If your employer has asked you to get an ABN it is highly likely you're not entitled to an ABN. Typically, workers engaged under an ABN when they're legally in an employment relationship are being underpaid and missing out on superannuation, paid sick leave and annual leave. They may also miss out on the safeguards of the Fair Work Act such as protection from unfair dismissal.
Employers that require their workers to be engaged under an ABN when they're really employees are engaging in 'sham contracting' and can be penalised by the ATO, the Fair Work Ombudsman and state and territory revenue offices and workcover agencies.
Before applying for an ABN, you need to have settled on the right structure for your business (for example, sole trader or company).
If you get an ABN you must continue to meet the entitlement requirements. If your business situation changes you may need to update or cancel your ABN.
We regularly review people who have been issued with an ABN to check that they're entitled and their details are up to date. Even if you've already been issued with an ABN, your entitlement may be reviewed.
When you apply for an ABN online, you will be asked a series of questions to check if you're entitled. If you're not entitled, your application will be refused.
You can also check your entitlement before starting an application. If you want to apply after answering the questions, your answers will be transferred to your application so you don't have to answer the questions again.
An enterprise includes activities done in the form of a business, as well as some other activities such as acting as the trustee of a super fund or other trust, operating a charity and letting property.
While there is no single test to determine if you're carrying on a business, the following features are indicative of activities in the form of a business:
Employees are not entitled to an ABN. This means you're not entitled to an ABN for work that you carry out as an employee (including as an apprentice, trade assistant or labourer), even if you or your employer calls it contracting. An employer can't ask you to get an ABN as a condition of employment.
A genuine contractor is running a business, which means they:
If you engage a worker
If you operate a business and engage a worker, you're responsible for determining whether they're an employee or contractorExternal Link under the law.
To determine whether a worker can be engaged under an ABN you need to look at the whole working relationship. To find out if your worker should be engaged as an employee or contractor use the employee/contractor decision toolExternal Link.
We regularly review businesses that engage workers using an ABN to identify 'sham contracting' arrangements and check the worker's entitlement to an ABN. Such cases may also be referred to the ATO and other government agencies to review the business's compliance with broader employer obligations.
While renting out an investment property may constitute an enterprise, renting out a residential property doesn't generally give rise to GST or pay as you go withholding obligations, so residential property investors don't need an ABN.
If your business or organisation is located outside Australia you may be entitled to an ABN if carrying on an enterprise:
If your business or other enterprise isn't yet underway, you'll need to have undertaken start-up activities such as:
While you don't need to have undertaken all of these start-up activities, you would be expected to have undertaken at least several of them.
When setting up your business, you need to be aware of the advantages and disadvantages of different business structures. Consider getting advice from a professional business adviser such as an accountant. Be aware that if you change your entity type after getting an ABN, you'll generally need to cancel your ABN and apply for a new one. There may also be impacts on your tax obligations and other business registrations.
Before applying for an ABN, you also need to have your business structure in place – for example, a company must have already been registered with ASIC.
There are specific requirements for each type of entity: