To be your boss, flexible work hours, and work for yourself – there are many perks of being a freelancer. However, before you are all set to kick start your freelance journey, make sure you legitimize your plans by seeking an Australian Business Number (ABN) beforehand.
Adhering to legal obligations is always crucial to run a successful business. Though obtaining an ABN is not mandated for freelancers, Once you get the ABN, it will ensure easier and smoother operations and is often necessary depending on your circumstances. Let’s explore all about ABN, the benefits of having one as a freelancer, and the steps to apply.
What is ABN?
ABN stands for ‘Australian Business Number’. It is an 11-digit unique number that is issued by the Australian Business Register and operated by ATO, Australian Taxation Office.
As the name suggests, ABN is a business identification number and its primary purpose is to let your business be identified by the rest of the world. This system simplifies the taxation process for businesses in Australia.
Do We Need An ABN As A Freelance?
Yes, If you are earning by providing freelance services in Australia, you need to have an Australian Business Number (ABN). Obtaining an Australian business number comes with several perks for a freelancer.
Build Professional image: ABN solidifies your brand image as a freelancer. It enhances your credibility, making your job legitimate among clients and other businesses.
Access to Clients and Suppliers: Clients, suppliers, and service providers mostly prefer businesses and individuals with ABN to carry business.
Government grants: An ABN is a must for applying for government grants and contracts in Australia, thus helping to build more job opportunities and expanding your business.
Send tax invoice: ABN on your freelance invoices ensures easier payment processing, smoother interactions with accounting departments, and helps in tax purposes.
This is a straightforward process. You can get an ABN for your new business by applying online at the Australian Business Register and it is free to register using online websites. Here’s a step-by-step guide to help you get started:
Here are the steps to apply for an ABN application form for freelancing in Australia:-
- Open the ABN page on the ABR site to apply.
- Select Apply for an ABN and select the individual type of entity.
- Select the right details that are asked for and review them.
- For the question “Does the applicant currently have an ABN? The answer is “No”.
- Fill out the details in the business information screen. Then, choose the business activity: type ‘Tutoring’.
- Select the reason for the application ‘to receive payment for services’.
- Confirm the application, make a note of ABN, and save it on your phone contacts under ABN.
Who can have an ABN number in Australia?
In Australia, self-employed individuals and freelancers have the option to obtain an ABN using different arrangements: sole traders working independently, partnerships established between multiple freelancers, companies registered as legal entities, and freelancers conducting business through trusts, based on the nature of their business operations. For each arrangement, having an ABN is essential for official identification and adherence to tax and business laws.
Wrap up:
One must apply for an ABN as a freelancer because it shows your professionalism towards other business that you deals with. Maintaining an ABN illustrates a commitment to obedience and transparency, building trust, and reputation in the business world. While offering just a tax identification it also provides credibility, simplifies transactions, and helps you expose your business in the market.
