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No-ABN withholding: why 47% gets held back, and how to avoid it
If you invoice a business without quoting your ABN, it may have to send 47% of your payment to the ATO instead of to you. Here's when that happens and how to stop it.
The rule
The ATO says payers must withhold 47% of the total payment for a supply unless one of these applies:
- they have an invoice or other document for the supply that quotes the supplier's ABN
- the ABN of the supplier's agent is quoted (if the supply is made through the agent)
- an exception applies, or the supplier isn't entitled to an ABN.
Payers may also have to withhold if they have reasonable grounds to believe the ABN quoted is invalid. If a payer doesn't withhold when required, it may have to pay a penalty equal to the amount it should have withheld.
Exceptions (via a "Statement by a supplier")
A supplier can give a Statement by a supplier instead of an ABN only if one or more of these applies:
- they're not carrying on an enterprise in Australia
- they're an individual under 18 and the payment doesn't exceed $350 a week
- the payment doesn't exceed $75, excluding GST
- the supply is wholly input taxed
- they're an individual and the supply is a hobby or private recreational pursuit, or wholly private or domestic
- they're an individual or partnership without a reasonable expectation of profit
- the whole payment is exempt income.
Supplier: how to avoid it
Quote your ABN by the time you're paid. The easiest way is to put it on every invoice. If you've applied but don't have it yet, you can ask the payer to hold the payment until you quote it. That's a matter between you and the payer. Any amount withheld is shown on a payment summary, which you can use to claim a credit in your tax return.
Payer: what you must do
Register for PAYG withholding, withhold 47%, report and pay it on your activity statement, give the supplier a PAYG payment summary – withholding where ABN not quoted, keep a copy, and lodge the annual report.
New to this? Start with ABN vs TFN.
Sources
- ATO: Statement by a supplier not quoting an ABN (47% rate, exceptions, payer obligations)
- ABR: Applying for an ABN
Last checked 16 Nov 2026. Rules and rates change; confirm on the official page before you rely on a figure.
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See it on Whop →Related guides
- ABN vs TFN: what's the difference?
- Tradie invoice template for Australia: what a tax invoice must show
- Small business templates for Australian sole traders
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.