Ensuring you're registered for the correct taxes is an essential step to opening your business.
The taxes you must register for depend on the type of business you're starting. Some tax registrations apply to all businesses and others may be compulsory depending on your business' size and type. Some registrations are entirely optional, but can make life easier if you have them.
Tax File Number (TFN)
You must have a TFN regardless of the type of business you're starting. If you plan on running your business as a sole trader, you can keep your individual TFN. If you're operating as a partnership, company or trust, you'll need to register a separate TFN for the business .
Australian Business Number (ABN)
Although you can run a business without an ABN, it is highly recommended you have one. Getting an ABN is free, and can make running your business easier in the future, particularly if you have to register for other taxes. For example, if you need to register for Goods and Services Tax (GST) now or in the future, you'll need an ABN first.
Without an ABN, other businesses must withhold 49% from payments they make to you for tax purposes.
Australian Company Number (ACN)
(Required for companies)
If you register your business as a company, you'll be given an ACN by the Australian Securities & Investments Commission. You'll need to apply for your ACN before getting an ABN.
If you're operating as a sole trader or partnership and decide that you want to become a company, you'll need to:
- make sure you have met any lodgement, reporting and payment obligations you have to government agencies (for example, activity statements, tax debts and pay as you go (PAYG) withholding reports)
- cancel your ABN
- register your business as a company and receive an ACN
- apply for a new ABN.
If you buy or sell goods and services
Goods and Services Tax (GST)
(Required for most businesses)
GST is compulsory if your business has a current or expected GST turnover of $75 000 or more ($150 000 or more for non-profit organisations). It's also compulsory if you provide taxi travel as part of your business, regardless of turnover.
Once you're registered for GST, any invoices you send to customers will need to include a GST component. Visit our Invoicing and collecting payments page for more information on invoicing, including tips for dealing with unpaid invoices.
pay salaries or wages
Pay as you go (PAYG) withholding
You must register for PAYG withholding if you need to withhold an amount from a payment for tax purposes.
Withholding an amount from a payment is required if you make payments to employees, directors or businesses that don't quote their ABN to you. In each case, you must register for PAYG before you can withhold that amount.
(Required in certain circumstances)
Payroll Tax is collected by each state and territory government on the wages paid by employers each month. You must register for Payroll Tax in each state or territory that your staff are location in if your monthly Australia-wide wage bill is above the thresholds set by that state or territory government.
For example, in financial year 2013-14, QLD and NSW have a 31-day threshold of $91 666 and $63 699 respectively. If you employ staff in QLD and NSW and your total Australia-wide wage bill for those 31 days is $95 000, you will need to register for Payroll Tax in both states. If your bill is $75 000, you would only need to register in NSW.
If your total Australian wage bill is under the maximum threshold for your state or territory, you're not liable to pay. Find out the monthly threshold by visiting the Revenue Office website in your state or territory.
Fringe Benefits Tax (FBT)
(Required in certain circumstances)
Providing perks, or fringe benefits, to your employees can attract FBT. This might include providing:
- a company car
- discount or free car parking
- low interest loans
- Christmas parties
- payment of private expenses as part of a salary package.
You should register for FBT as soon as you decide to start providing fringe benefits to your employees.
There may be more specific taxes that apply to your business depending on your industry. Visit our Taxation topic for information on these taxes.
Superannuation, though not a tax, is a requirement if you employ staff. Visit our Employee superannuation page for more information on paying super to your staff.
The Australian Tax Office also provides further information on:
Other registrations & licences
Visit our Registration and Licences page to help you get started on registering your business, as it covers areas such as registering your business or company.
You can also discover non-tax registrations and licences that apply to your new business by visiting the Australian Business Licence and Information Service (ABLIS) .