Do I Need an ABN as a Freelancer?
Find out whether you need an ABN for your freelance work.
Pursuing a hobby and being paid for it may be an exciting, rewarding and liberating experience. However, there are a few legal obligations that must be considered before charging consumers for your goods or services – one of which is the need for an Australian Business Number (ABN).
What is an ABN?
An ABN is an 11-digit number considered by the community and government agencies when interacting with your business. It is the number considered by the ATO when managing and dealing with your tax obligations. For more information regarding ABNs, please see our article What is an ABN?.
Do You Need an ABN?
Yes – you will need an ABN.
If you are a freelancer that is paid for the goods or services you provide, you would need an ABN for invoicing regardless of whether you earn more or less than the tax-free threshold of $18,200.
According to the Australian Taxation Office (ATO), businesses are legally capable of withholding 46.5% of your payments if an ABN is not present on the invoice. Additionally, operating with an ABN assists in declaring and gaining from any tax deductibles that have been incurred throughout the financial year.
Furthermore, if you are a freelancer making more than $75,000 p.a. you must register for GST which requires the existence of an ABN.
For information regarding how to apply for an ABN, check out our guide How to Apply for an ABN.
Need to register an ABN? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our lawyer marketplace or any other legal needs.
Zac is a consultant at Lawpath, Australia’s largest and fastest growing online legal platform. Since joining Lawpath, Zac has assisted 1000s of startups and small business’s with their legal needs.