ABN number: what it is, who needs one and how to apply

Published Monday 15 June 2026

Table of contents

• What is an ABN?
• Why do you need an ABN?
• What are the advantages of having an ABN?
• Who needs to apply for an ABN?
• What you need to apply for an ABN
• How to apply for an ABN
• What happens after you apply for an ABN?
• How to check an ABN
• ABN vs ACN: what's the difference?
• Common ABN misconceptions
• What happens if you don't have an ABN?
• Manage your ABN with Xero
• FAQs on ABNs

Key takeaways

• An Australian Business Number (ABN) is a free, unique 11-digit identifier that the government uses to recognise your business across all dealings with the ATO, other businesses, and the public.
• Apply for your ABN early in your business setup, as operating without one means other businesses must withhold 47% tax from payments they make to you.
• Gather your Tax File Number (TFN), business structure details, and contact information before you start your ABN application so you can complete the free online process in 10 to 15 minutes.
• If your annual turnover reaches $75,000, you must register for GST within 21 days of meeting the threshold.

What is an ABN?

An Australian Business Number (ABN) is a unique 11-digit number that identifies your business to the government, other businesses, and the community. It's issued by the Australian Business Register (ABR) and is free to apply for.

Your ABN stays with your business for as long as you operate. You'll use it when dealing with:

• government agencies like the Australian Taxation Office (ATO)
• other businesses as a supplier or customer
• the public for transactions and invoicing

Your ABN is your business's identity number. It connects your business to the tax system and lets others verify that you're a legitimate operator.

Why do you need an ABN?

Most Australian businesses are legally required to have an ABN. Beyond compliance, an ABN unlocks essential business functions you can't access without one.

You need an ABN to:

• register a business name with the Australian Securities and Investments Commission (ASIC)
• secure a .com.au domain for your website
• access digital services like eInvoicing
• avoid tax withholding on business payments
• register for Goods and Services Tax (GST)

What are the advantages of having an ABN?

An ABN establishes your business as legitimate with suppliers, customers, and government agencies. Most businesses expect you to provide an ABN before they'll work with you.

With an ABN, your business can:

• claim GST credits: recover GST on business purchases when registered
• avoid tax withholding: keep your full payment instead of losing nearly half to tax
• access business accounts: sign up with suppliers like telcos and energy providers
• register a .com.au domain: secure your Australian web presence
• apply for grants: qualify for government support payments
• employ staff: hire workers and meet payroll obligations

Without an ABN, other businesses must withhold tax from payments more than $75 (excluding GST). The ATO requires them to withhold the top rate of tax, which is 47%, from the payment. While you can claim this back at tax time, it creates cash flow problems. According to Xero Small Business Insights, Australian small businesses already wait an average of 23.9 days to be paid; adding a 47% withholding on top of that wait can put serious strain on your working capital.

Apply for your ABN early in your business setup process. Most business activities require an ABN, so getting one upfront prevents delays in operations.

Who needs to apply for an ABN?

Most businesses operating in Australia need an ABN. This includes sole traders, partnerships, companies, and trusts conducting business activities.

Your ABN and GST requirements depend on your situation:

• if you earn over $75,000 annually: you must have an ABN and register for GST within 21 days of meeting the requirement
• if you earn under $75,000 annually: you can apply for an ABN and register for GST later
• if you drive for taxi or ride-share services: you must register for GST regardless of turnover

Read more about who is entitled to get an ABN on the Australian Business Register website.

You should seek professional advice from an accountant or lawyer before deciding whether to apply. Visit the Xero advisor directory if you need help finding someone.

What you need to apply for an ABN

The application is free and takes around 10 to 15 minutes to complete online. Gather this information before you start:

• your Tax File Number (TFN)
• your business structure, such as sole trader, partnership, company, or trust
• your business name, if different from your personal name
• your business address and contact details
• a description of your main business activity

Having everything ready before you begin means you can complete the application in one sitting.

How to apply for an ABN

ABN applications are free and processed through the Australian Business Register (ABR). The online application typically takes 10 to 15 minutes.

Here's how to apply:

1. Visit the Australian Business Register website and select "Apply for an ABN".
2. Choose your business structure (sole trader, partnership, company, or trust).
3. Enter your personal details and Tax File Number.
4. Describe your main business activity.
5. Add your business name and contact information.
6. Review your application and submit.

Read the detailed guide on how to apply for your ABN for more information.

What happens after you apply for an ABN?

Most ABN applications are approved instantly. If your details are correct and can be verified automatically, you'll receive your 11-digit ABN straight away.

Some applications require manual review, which can take up to 20 business days. This happens when:

• your identity can't be verified automatically
• your business structure needs clarification
• your application is missing information

You can check the status of your application on the ABR website.

Common reasons your ABN application might be rejected

Most applications succeed, but rejections can happen. Here are some common reasons:

• you're not entitled to an ABN because you're not carrying on a business
• your identity can't be verified
• your business structure details are incorrect
• you've provided incomplete information

If your application is rejected, you'll receive a letter explaining why and what to do next.

How to check an ABN

The ABN Lookup tool lets you verify any business's ABN for free on the Australian Business Register website. Use it to confirm the legitimacy of businesses you're dealing with.

ABN Lookup shows you:

• the business's registered ABN
• their official business name
• their GST registration status
• their ABN registration date

Checking a supplier's ABN before you pay them helps you avoid scams and confirms their GST status.

ABN vs ACN: what's the difference?

An ABN and an Australian Company Number (ACN) serve different purposes, and it's common to confuse them. Here's how they compare.

• An ABN is an 11-digit number that identifies any type of business to the government. Sole traders, partnerships, trusts, and companies can all hold an ABN.
• An ACN is a 9-digit number issued by ASIC specifically to registered companies. Only companies receive an ACN.
• A company needs both an ABN and an ACN. Your ACN is issued when you register the company, and you apply for your ABN separately.
• A sole trader, partnership, or trust only needs an ABN. These structures don't receive an ACN because they're not registered as companies.

Common ABN misconceptions

There are a few widespread myths about ABNs that catch new business owners off guard. Here are 3 worth knowing.

• An ABN doesn't mean you're registered for GST. GST registration is a separate step, and you're only required to register once your annual turnover reaches $75,000 (or immediately if you drive for a taxi or ride-share service).
• An ABN doesn't give you the right to a business name. To protect a business name, you need to register it separately with ASIC. Your ABN only identifies your business to the government for tax and regulatory purposes.
• An ABN doesn't automatically mean you're running a business. The ATO can cancel your ABN if you're not genuinely carrying on a business. Activities like occasional hobby sales may not qualify.

What happens if you don't have an ABN?

Operating without an ABN when you need one creates real problems for your business. The consequences go beyond inconvenience.

• Businesses that pay you must withhold 47% of each payment (excluding GST) and send it to the ATO. You can claim this back at tax time, but it leaves you short on cash in the meantime.
• You can't register for GST without an ABN, which means you can't claim GST credits on business purchases or issue tax invoices.
• You'll have limited access to government services, grants, and programs that require an ABN for eligibility.

If your business is already operating without an ABN, apply as soon as possible to avoid ongoing withholding and missed opportunities.

Manage your ABN with Xero

Once you have your ABN, keeping your details up to date is straightforward with cloud accounting software. Xero lets you add your ABN to invoice templates, track GST obligations, and manage your business finances in one place.

Stay on top of your ABN details and business admin from day one. Get one month free.

FAQs on ABNs

Here are answers to frequently asked questions about ABNs.

What happens if I operate without an ABN when I need one?

Businesses that pay you must withhold 47% tax from each payment and send it to the ATO. You'll also have limited access to government services and won't be able to register for GST.

How long does it take to get an ABN approved?

Most applications are approved instantly if your details can be verified automatically. If manual review is needed, it can take up to 20 business days.

Can I start using my ABN immediately after applying?

Yes, if your application is approved and you receive your ABN straight away, you can start using it for business purposes immediately.

Do I need an ABN for a hobby business?

If you're earning income from a genuine hobby and not carrying on a business, you generally don't need an ABN. The ATO looks at factors like profit intent, regularity, and business-like behaviour to determine whether an activity qualifies as a business.

What's the difference between an ABN and a Tax File Number?

A Tax File Number (TFN) identifies you as an individual taxpayer, while an ABN identifies your business. As a sole trader, your TFN is also used to lodge your personal tax return that includes your business income. You need a TFN to apply for an ABN, but they serve different purposes.

Can I use one ABN for multiple businesses?

You can use one ABN if you run multiple businesses under the same legal structure, such as a sole trader with 2 different activities. If each business has a separate legal structure, each one needs its own ABN.