Small business tax registrations

Tax requirements can be complicated and confusing but a small business cannot afford to make mistakes. Make sure you are aware of the registrations you need in order to be compliant with Australian Tax Office (ATO).

Registrations can differ according to industry and business operations however, there are four common tax registrations. If you are unsure what you are required to do or how to do it, engage an accountant or tax agent to assist. The fee they charge will be worth your piece of mind.

Common small business tax registrations include:

  • Australian business number (ABN)
  • Tax file number
  • Goods and services tax (GST)
  • Pay as you go (PAYG) withholding
  • Other business tax registrations

Australian business number (ABN)

An ABN is an 11 digit identification number to assist in dealing with the ATO, government departments and other businesses. While an ABN is not required to trade in Australia it does:

  • allow other businesses to easily confirm your details
  • assist with GST requirements
  • avoid having payments withheld (under PAYG withholding)
  • allow you to claim fuel tax credits, if you are eligible.

An ABN is essential if you are required to register for GST. Once you have received your ABN, make sure you include it on all your stationary, particularly invoices. If you fail to include your ABN on invoices, businesses are required by law to withhold 46.5 percent of any payment made to you.

One ABN is required for each operating entity so if you have two separate companies, partnerships and trusts, you must apply for an ABN for each.

You can apply for an ABN through the Australian Business Register (

Note: before you apply for an ABN, you must be issued with an Australian Company Number from the Australian Securities and Investments Commission (ASIC). You can do this at the ASIC website (

Tax file number
A tax file number is a unique number assigned by the ATO for identification and administration purposes. Most people will already have an individual tax file number and if you operate as a sole trader this will suffice. However if you operate your business as a partnership, company or trust you will need to apply for a separate business tax file number. If you don't have a tax file number, tax may be withheld from payments made by investment bodies.

You can apply for a tax file number through the ATO ( or when you register for an ABN.

Goods and services tax (GST)
GST is a tax of 10 percent on most goods, services and other items sold or consumed in Australia. You must register for GST if your business:

  • has a GST turnover exceeding $75,000
  • provides taxi travel
  • intends to claim fuel tax credits.

It's optional to register for GST if you do not meet these criteria.

If you do exceed the $75,000 threshold, your business has 21 days to register with the ATO before you are penalised. Turnover is monitored by the ATO for this purpose so to avoid the penalties it's recommended you also keep an eye on your turnover. Penalties can include being charged the GST on all sales - which is 10 percent of your sales income.

If you feel your business will exceed the threshold, it is advisable to register in advance to protect your income and reduce the risk of alienating clients (by suddenly rising prices to cover tax and maintain your net profit). However, if you are unsure, speak to your accountant or tax agent.

You can register for GST by visiting the ATO website ( or instructing your accountant to register on your behalf.

Pay as you go (PAYG) withholding
PAYG withholding is an ATO system of withholding amounts and tax on business and investment income. Such payments include:

  • payments made to employees, company directors and office holders (not applicable for sole traders or partnerships) like salary, wages, commissions, bonuses or allowances
  • payments made to contractors, under labour hire or voluntary agreements
  • withholds of 46.5 percent from payments to businesses which failed to quote their ABN on invoices or can prove they are exempt.

If any of these payments apply to your business, you must register for PAYG withholding before the day you need to withhold an amount from a payment.

Register for PAYG withholding as an employer by visiting the ATO website (

Other business tax registrations
Less common business tax registrations include:

  • fringe benefits tax
  • fuel tax credits
  • super tax
  • luxury car tax
  • wine equalisation tax.

If these registrations apply to your business, you can register with the ATO. If you are unsure you can contact the ATO for clarification.

It pays to be aware of your business tax registration requirements to avoid penalty. If you are unsure of your responsibilities, talk to the ATO, a tax agent or your accountant.

Does your tax bill send you cowering each year? Find out how to reduce your tax bill by visiting Five tips to cut your tax bill >>

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