Do I Need an ABN as a Freelancer? (2024 Update)

Working for yourself can be an exciting, rewarding and liberating experience. However, there are a few legal issues that you should consider before charging consumers for your goods or services. One of these is how you’ll register your business and whether as a freelancer you require an Australian Business Number (ABN).

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Working as a freelancer

Working freelance means that you don’t work for any one employer, but rather a number of different businesses. Freelancers are self-employed, which means that they’re responsible for managing their income and taxes. Working as a freelancer is common in many creative professions such as journalism, design and music.

What is an ABN?

An ABN is an 11-digit number which identifies Australian businesses. Every registered business in Australia is require to have an ABN. For sole traders, ABNs are important as they are linked to your individual name and Tax File Number (TFN). If you’re earning income from services you provide, then it’s important to have an ABN. This is so you are taxed the right amount. For more information regarding ABNs, see our article What is an ABN?.

Do You Need an ABN?

Yes, if you intend to earn an income off of your freelance work.

Further, there are many business activities you need an ABN for including issuing B2B invoices and registering for GST and Payroll Tax. 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.

Applying for an ABN

You can apply for an ABN easily online by filling in your personal details. Your ABN will be directly connected to your legal name if you are a sole trader or partnership and you will be taxed on your personal income. Your ABN will link to your company name if you register a company, and corporate tax rates will apply 

Once your application is processed your ABN can be searched under the ABN Lookup. As a result, certain details are publicly available such as your business structure, name and the location of your business.

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.

Protecting your work

As a freelancer, most of your work will be protected under copyright. However, if you are creating work for another business, you will need to ensure they receive the intellectual property rights once the work is completed. Further, it’s important to ensure that you receive compensation for your work. You can do this by issuing a services agreement which outlines how much you will be paid for the work. If you have any further questions about protecting your rights as a freelancer, it may be worth getting in touch with a lawyer.

In summary

In brief, yes, you have to have an ABN as a freelancer if you intend to receive income from your activities. Luckily, the process for obtaining an ABN is a simple online application.

There are also numerous benefits that arise from having an ABN. The most prominent one, however, is your tax benefits. Having an ABN allows you to maximise the tax deductions that you can gain from running your business. If you would like to learn more about an ABN and register one, you can contact our business services team here.

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