What is an ABN and Do You Need One to Invoice Clients in Australia?

If you are starting a business or freelancing in Australia, you will quickly hear about ABNs. This guide explains exactly what an ABN is, why you need one, and how to get one for free in about 15 minutes.

What is an ABN?

ABN stands for Australian Business Number. It is a unique 11-digit number that identifies your business to the government, other businesses, and the public.

The ABN system is run by the Australian Business Register (ABR), which is managed by the ATO. Every business entity in Australia — sole traders, companies, partnerships, and trusts — has its own ABN.

Your ABN is public information. Anyone can look up any ABN at abn.business.gov.au to verify that a business is legitimate. This transparency is part of what makes the Australian business system trustworthy.

Do You Need an ABN to Invoice Clients?

Technically no — but practically yes. Here is why:

If you send an invoice without quoting an ABN, your client is legally required by the ATO to withhold 47% of the payment and send it to the ATO on your behalf. This means if you invoice $1,000 without an ABN, your client can legally pay you only $530 and send $470 to the ATO.

In practice, most clients will simply refuse to pay an invoice without an ABN rather than deal with the withholding tax paperwork. So while you can technically invoice without one, you almost certainly will not get paid without one.

Getting an ABN takes 15 minutes and is completely free. There is no reason not to have one.

Who Can Get an ABN?

You can apply for an ABN if you are carrying on a business or enterprise in Australia. This includes sole traders (freelancers, contractors, self-employed people), companies, partnerships, trusts, and non-profit organisations.

You do not need to be earning a lot of money to get an ABN. Even if you are just starting out and have not made your first dollar yet, you can apply as long as you genuinely intend to carry on a business.

How to Get an ABN — Step by Step

Getting an ABN is free and done entirely online. Here is exactly how:

Step 1: Go to abr.gov.au

Step 2: Click "Apply for an ABN"

Step 3: You will be taken to the Australian Business Register application. Click "Apply for an ABN."

Step 4: Answer the questions about your business structure. For most freelancers and sole traders, select "Sole Trader."

Step 5: Enter your personal details including your tax file number (TFN). Having your TFN makes the process faster.

Step 6: Describe your business activities. Be specific — "graphic design services" or "building and construction" rather than just "consulting."

Step 7: Enter your contact details and business address. For sole traders working from home, your home address is fine.

Step 8: Review and submit. Most applications are approved immediately or within 20 minutes. You will receive your ABN by email.

The whole process takes about 15 minutes.

What Can You Do With an ABN?

Once you have your ABN you can issue professional tax invoices, register for GST if your turnover reaches $75,000, register a business name with ASIC, open a business bank account, claim business expenses on your tax return, access government grants and tenders, and avoid the 47% tax withholding on payments.

ABN vs ACN — What is the Difference?

This confuses many people. Here is the simple explanation:

ABN — Australian Business Number. Every business entity has one. Sole traders, companies, everyone.

ACN — Australian Company Number. Only companies (Pty Ltd) have an ACN. It is issued when you register a company with ASIC. Companies have both an ACN and an ABN.

As a sole trader, you only need an ABN. You do not have an ACN unless you set up a company structure.

How to Display Your ABN on Invoices

Your ABN should appear clearly near the top of your invoice, usually next to or below your business name. The standard format uses spaces to make it readable:

12 345 678 901

Not: 12345678901

The spaced format is easier to read and is what Australian businesses expect to see.

What if Your ABN Application is Rejected?

The ATO may reject your ABN application if they are not convinced you are genuinely carrying on a business. This sometimes happens when applications are vague about business activities.

If rejected, you can reapply with more specific information about what your business does, who your clients are, and how you plan to generate income. Having a simple business plan — even a one-page document — helps demonstrate genuine business intent.

This article is for general information purposes only. For advice specific to your tax situation, consult a registered tax agent or accountant.