Do You Need an ABN as an Independent Contractor?

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In this series of posts we’re looking at common questions that arise regarding when it’s appropriate to register for an ABN. If you are considering or already involved in business activities as an independent consultant or freelancer, you should consider registering for an ABN.

Do You Need an ABN as an Independent Contractor?

If you are considered an Independent Contractor i.e. running your own business, hiring out your specialised services to other organisations you will be considered an independent contractor.

If you are gaining work from online hiring platforms such as Freelancer, Airtasker, Elance and Odesk you will need to think about obtaining an ABN.

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Obtaining an ABN is advisable before undertaking work as an independent contractor, otherwise businesses may legally withhold 46.5% of payments from you. All businesses need to apply for an ABN. Independent Contractors negotiate their own fees and working arrangements, and can work for a variety of clients at one time and hence operate as a business needing an ABN for invoicing.  Some workers including apprentices, trade assistants, labourers, 457 visa holders, and labour hire workers are not entitled to obtain an ABN.

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