Do I Need an ABN for My Side Hustle in Australia?

An Australian Business Number (ABN) is one of the first things people ask about when starting a side hustle. The answer isn't always a simple yes or no — it depends on whether what you're doing is a business or a hobby in the ATO's eyes. This guide cuts through the confusion.

The Short Answer

What Is an ABN?

An Australian Business Number is an 11-digit number that identifies your business to the government and other businesses. It's issued by the Australian Business Register (ABR) and is used for tax purposes, invoicing, and GST registration.

It's completely free to register and takes about 10 minutes online at abr.gov.au. There is no fee, no ongoing cost, and no commitment. You can cancel it at any time.

The Business vs Hobby Test

The ATO's treatment of your income — and whether you need an ABN — hinges on one key distinction: are you running a business or pursuing a hobby?

This matters because:

• Hobby income is generally not taxable, but you can't claim deductions and don't need an ABN
• Business income is taxable, but you can claim all genuine expenses as deductions — and you should have an ABN

The ATO considers these factors when determining if you're in business:

What Happens If You Don't Have an ABN?

If you're running a business and a client asks for your ABN — or notices you haven't quoted one on an invoice — they are legally required by the ATO to withhold 47% of the payment and send it to the ATO on your behalf. This is called "no-ABN withholding."

You can eventually claim that withheld tax back in your tax return, but it creates a significant cash flow problem. Being paid $500 for a job and only receiving $265 because you didn't have an ABN is a painful and completely avoidable situation.

6 Reasons to Get an ABN Even If You're Not Sure

Given that registration is free and takes 10 minutes, the bar for getting one is very low. Here's why most side hustlers should just get one:

• Avoid 47% withholding — any business client will require your ABN before paying you
• Claim GST credits — if you ever register for GST, you can claim back the GST on your business expenses
• Look professional — an ABN on your invoices establishes you as a legitimate operator
• Access wholesale pricing — many suppliers require an ABN to open a trade account
• Future-proof — if your side hustle grows, you already have your business identity established
• Protect your brand — you need an ABN before you can register a business name with ASIC. A registered business name protects your trading identity and is the first step toward trade mark protection as your side hustle grows

How to Get an ABN — Step by Step

ABN vs Business Name — What's the Difference?

An ABN is a tax identifier. A business name is what you trade under. They're separate registrations:

• ABN — free, identifies you to the ATO, required for tax purposes
• Business name — $44/year with ASIC, required only if you trade under a name other than your own legal name

If you freelance as "Jane Smith" using your own name, you only need an ABN. If you trade as "Sunrise Creative Studio," you also need to register that business name with ASIC.

This matters for brand protection. A registered business name prevents others from trading under the same name in Australia. For side hustlers selling products — Etsy sellers, makers, designers — registering your trading name is often the first step before pursuing a trade mark for your logo or product name. You cannot register a business name without an ABN, so getting your ABN first is the foundation of building a protected brand identity.

ABN and GST — Are They the Same?

No — they're separate. An ABN identifies your business. GST registration is a separate step you only need to take when your revenue reaches $75,000 in a 12-month period (or from day one if you do rideshare driving). Once you cross this threshold you must register within 21 days — penalties apply for late registration.

You can have an ABN without being registered for GST. Most side hustlers earning under $75,000 have an ABN but are not GST-registered.

Quick Summary

This article is for general informational purposes only and does not constitute tax or financial advice. Always verify with the ATO or a registered tax agent for advice specific to your situation.