If you’re starting a new job, side hustle, or small business, you’ll likely come across two important acronyms: TFN (Tax File Number) and ABN (Australian Business Number). While they may seem similar, they serve very different purposes, and knowing which one you need is essential.
What’s a TFN?
- A Tax File Number is your personal identifier for dealings with the ATO.
- It’s needed if you’re employed, earning investment income, or lodging a tax return.
- Without one, you may pay higher tax rates.
What’s an ABN?
- An Australian Business Number is used if you’re running a business or providing services as a sole trader, contractor, or through a company.
- It identifies your business to the government, suppliers, and customers.
- An ABN is also required to register for GST once your turnover exceeds $75,000.
Which one do you need?
- Employees → TFN only.
- Freelancers, contractors, and business owners → ABN (and often a TFN too, for personal tax).
- Some people need both, depending on whether they work as an employee and run a business.
Think of your TFN as your personal tax identity and your ABN as your business identity. Getting it right from the start will help you stay compliant and avoid unnecessary tax issues.
For more detailed information, visit the Australian Taxation Office (ATO) website.
Remember, if you’re unsure which option applies to your situation, Pisani Group is here to help. Our team can guide you through the setup and ensure you stay compliant while making the most of your tax opportunities.
