The registrations, in the order they come
Not every company needs every one. This register sets out who issues each and when a company needs it.
| Registration | Issued by | When a company needs it |
|---|---|---|
| Australian Company Number (ACN) | ASIC, on registration | Always: it comes with registration, and comes before the ABN. |
| Tax file number (TFN) | The ATO | Always: a company must apply for its own. |
| Australian Business Number (ABN) | The Australian Business Register | A company registered with ASIC is entitled to one; it is needed to register for GST. |
| GST | The ATO | At $75,000 GST turnover ($150,000 for a non-profit), and in some other cases; optional below it. |
| PAYG withholding | The ATO | Before the first payment it must withhold tax from, such as wages to employees or directors. |
| Fringe benefits tax (FBT) | The ATO | As soon as it decides to give employees fringe benefits. |
| Payroll tax | Each state and territory | When its total Australian wages are above the threshold of a state or territory where it employs staff. |
Several of these can be done together. The Business Registration Service lets you apply in one place for the company, its ACN and ABN and a business name, and the ATO says that when applying for an ABN you can also register for taxes like GST and PAYG withholding at the same time.
The ABN
An ABN is a unique 11-digit number that identifies a business to the government and the community. Companies registered with ASIC are entitled to one, and business.gov.au says registering for it is free. When applying, the ATO asks companies to provide their ACN. A company’s ABN is often its ACN with 2 extra digits in front, ASIC notes.
Not having one has a cost: business.gov.au says other businesses must withhold 47% tax from payments they make to a business without an ABN.
If the application succeeds, you get the ABN immediately and can apply straight away for other registrations such as GST. If you get a reference number instead, the Register may need to check details, and aims to review the application within 20 business days. A refusal comes with a refusal number and a letter within 14 days giving reasons and review rights. Afterwards, the ABN’s details have to be kept up to date; business.gov.au gives 28 days after you become aware of a change.
The company’s tax file number
A sole trader can use their own TFN for the business; a company needs a separate one. Most businesses can apply for it while completing the ABN application, and the Register says details such as the ACN, business locations, authorised contacts and associates help it go through faster. The Register says to expect the TFN within 28 days of receiving the completed application, and not to lodge a second one in the meantime.
GST
GST is a 10% tax on most goods, services and other items sold or consumed in Australia. The ATO says you must register for GST:
- when GST turnover reaches $75,000 or more ($150,000 for a non-profit);
- when you start a new business and expect turnover to reach that threshold in the first year;
- if you provide taxi or limousine travel for passengers, including ride-sourcing, whatever your turnover;
- if you earn income through the sharing economy or digital platforms;
- if you want to claim fuel tax credits.
GST turnover is total business income, not profit, minus certain amounts such as the GST in your sales. It is measured two ways: the current month plus the previous 11, or the current month plus the next 11 as projected. Once you are required to register, you have 21 days to do it.
Below the threshold, registering is optional, but if you choose to, you generally must stay registered for at least 12 months. Registering means including GST in the price of most sales, claiming GST credits on most business purchases, and lodging activity statements. If you don’t register when required, you may have to pay GST on sales made since you should have registered, even if you didn’t include GST in their price, and penalties and interest may apply.
You need an ABN first. Then you can register through the ATO’s Online services for business, by phoning its business enquiries line, or through a registered tax or BAS agent. The ATO’s contact page has its numbers.
PAYG withholding
Withholding is when a business takes tax out of some payments and pays it to the ATO. A company generally withholds from payments to its employees and its directors, to businesses that don’t quote an ABN, and to contractors who ask for a voluntary agreement. It must register before the first payment it withholds from; with an active ABN, that can be done online.
This is one of the places a company differs from a sole trader. A sole trader’s drawings are not wages and need no withholding; a company may pay its directors wages or directors’ fees, but they can’t take money out as personal drawings. The ATO adds that a company must pay super guarantee for eligible workers, including its directors.
FBT, payroll tax and the rest
Fringe benefits tax applies to some benefits given to employees or their associates, such as a car for private use or low-interest loans, and business.gov.au says to register as soon as you decide to provide them. Payroll tax is a state and territory tax, and each sets its own threshold. Depending on the business, there may also be fuel tax credits, excise, wine equalisation tax or luxury car tax.
Getting into the online services
To use government online services for a business, such as Online services for business or the ABR, the ATO says to set up your Digital ID and Relationship Authorisation Manager (RAM).
The tax registrations come with a company tax return every year; the ASIC side of the company’s year is step 6.