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ABN vs TFN: what's the difference?
A TFN is you. An ABN is your business. Most sole traders end up with both, and mixing them up causes real problems, like a client holding back almost half of your payment.
| TFN (tax file number) | ABN (Australian business number) | |
|---|---|---|
| What it is | A personal 9-digit reference number that identifies you in the tax and super system | A unique 11-digit number that identifies your business to the government and community |
| Issued by | ATO | Australian Business Register (ABR) |
| Who gets one | Anyone who wants to work, get government benefits or lodge a tax return. Free to apply; you keep it for life | Only people or entities carrying on an enterprise. Not employees, for their employee work |
| Where you use it | Employers, super funds, your bank, your tax return | Invoices, quotes, GST registration, ABN Lookup |
| Is it public? | No. Keep it private | Yes. Your ABN details go on the public register (you can ask for some details to be suppressed) |
Do I need an ABN?
You're entitled to an ABN if you're carrying on an enterprise, like a sole trader business. The ABR warns that not everyone is entitled, that applying when you aren't can lead to prosecution, and that it may review your entitlement at any time. If you're working as an employee, you aren't entitled to an ABN for that work, even if someone asks you to "get an ABN". The ATO explains the employee vs contractor difference on its Working as an independent contractor page.
How a sole trader uses both
- Invoices: put your ABN on them. A tax invoice must show it (see our invoice guide).
- Tax return: you lodge an individual return with the business and professional items schedule. There's no separate business return, and you must lodge even if your income is under the tax-free threshold.
- GST: you need an ABN before you can register for GST (see the $75,000 threshold).
- Getting paid: if you don't quote your ABN, a business may have to withhold 47% (see no-ABN withholding).
Getting your ABN set up in the right order? Our free ABN and sole trader startup checklist guide walks through it.
FAQ
Do I need an ABN and a TFN?
Most sole traders have both. Your TFN is your personal tax number, which you use to lodge your individual return. Your ABN identifies your business to the government and to customers, and you quote it on invoices.
Can I get an ABN if I'm an employee?
Not for that work. The ABR says that if you've been engaged to carry out activities as an employee, you aren't entitled to an ABN for that activity.
What happens if I don't give a business my ABN?
Unless an exception applies, a business paying you more than $75 (excluding GST) for a supply generally has to withhold 47% of the payment and send it to the ATO. See our no-ABN withholding guide.
Does a sole trader need a separate tax return?
No. The ATO says sole traders lodge a tax return for individuals, including the business and professional items schedule, even if income is below the tax-free threshold.
Sources
- ATO: What is a tax file number? (free to apply)
- ABR: Applying for an ABN
- ABR: Sole trader ABN entitlement
- ATO: Income tax return (sole traders)
- ATO: Statement by a supplier not quoting an ABN (47%)
- ATO: Working as an independent contractor
Last checked 16 Nov 2026. Rules and rates change; confirm on the official page before you rely on a figure.
Want it done for you? ABN & Sole Trader Startup Checklist (PDF, DOCX, XLSX)
Our ABN & Sole Trader Startup Checklist puts every setup step (ABN, business name, GST decision, records, insurance) in order with official links. Disclosure: it's our own product, so we earn money if you buy it. You don't need it to use the free calculator on this page.
- Fillable 9-page A4 PDF checklist
- Editable .docx version
- .xlsx tick-list with a progress count
- 25 official sources, facts checked 15 Nov 2026
US$7.99 one-time on Whop. Instant download.
See it on Whop →Related guides
- ABN and sole trader startup checklist for Australia
- No-ABN withholding: why 47% gets held back, and how to avoid it
- Sole trader tax rates 2026–27: free income tax calculator
General information only, not financial, tax or legal advice. Check the official pages linked above, or ask a registered tax agent, before you rely on anything here. Last checked 16 Nov 2026.