Proposals · Glossary
Do I need an ABN on my invoice?
If you are invoicing another business in Australia, you should quote your ABN. A tax invoice must show the seller's ABN, and if a business buyer pays you without an ABN being quoted, they are generally required to withhold tax at the top marginal rate from the payment. Consumers do not need your ABN, but showing it is good practice.
The ABN on an invoice does two jobs: it makes the invoice a valid tax invoice and it stops your business customers from having to hold back nearly half of your payment. Leaving it off is an expensive oversight.
Nuwan Madhusanka · Co-founder
4 min read · Published
When the ABN is required
A tax invoice, the document a GST registered business issues so its buyer can claim a GST credit, must include the seller's identity and ABN. That makes the ABN mandatory on every tax invoice. Even if you are not registered for GST, you should quote your ABN to business customers, because the ATO requires a business paying a supplier who has not quoted an ABN to withhold tax from the payment unless an exception applies. For a sole trader that can mean losing 47 percent of the invoice until tax time.
No ABN withholding
The ATO lists businesses that do not quote their ABN among the most common payments a payer must withhold from. The withholding rate is the top marginal tax rate plus the Medicare levy, and the payer sends it to the ATO. The supplier can claim it back in their tax return, but the cash is gone for months. Exceptions exist, such as payments for hobbies or private recreational pursuits, supplies under 75 dollars excluding GST, or a supplier who gives a written statement explaining why no ABN is needed.
Where to show it
Put the ABN in the invoice header next to the business name, or in the footer where the buyer's accounts team expects it. Use the full eleven digit number with standard spacing. If you trade under a business name, show the legal entity name too, because the ABN belongs to the entity. For tax invoices of 1,000 dollars or more, also show the buyer's identity or ABN, which the ATO requires at that value.
Common mistakes
Quoting an ABN that has been cancelled, or that belongs to a different entity in the group, can cause withholding and GST credit problems for the buyer. Showing an ABN but charging GST when you are not registered is a serious error. Leaving the ABN off an invoice template used for years means business clients may have been withholding all along. Check your details on ABN Lookup, which is public.
Where it shows up in the product
Invoice PDFs render server side with a business block taken from the account's default brand kit and profile: the name or wordmark, the logo, the website and contact details. Bank details print on the invoice and on the public pay page. A client record has a Tax ID field for an ABN, VAT or EIN number, which prints in the bill to block as Tax ID, covering the buyer's ABN on larger tax invoices. The business block has no ABN field of its own today, so add your own ABN to the invoice notes, and set the tax rate on items so the GST line shows. The default currency is AUD with GST as the tax label.
Questions people ask
Do sole traders need an ABN on invoices?
If you are running a business and invoicing other businesses, yes. Without an ABN quoted, your business customers are generally required to withhold tax from your payments at the top rate. Applying for an ABN through the Australian Business Register is free, and once you have one it should appear on every invoice.
Do I need an ABN if I am not registered for GST?
You can have an ABN without being registered for GST, and many small businesses do. You should still quote it on invoices to businesses to avoid withholding. Just do not charge GST or call the document a tax invoice. Registration for GST is required once your GST turnover reaches 75,000 dollars.
Does the customer's ABN need to be on my invoice?
For tax invoices of 1,000 dollars or more, the ATO requires the buyer's identity or ABN. Below that, it is optional. Including the buyer's business name and ABN on larger invoices also helps their accounts team process the invoice quickly, which tends to mean faster payment.
What happens if I forget my ABN on an invoice?
Reissue the invoice with the ABN before the customer pays. If they have already paid and withheld tax because no ABN was quoted, that amount goes to the ATO and you claim it as a credit in your tax return. For GST, an invoice without your ABN is not a valid tax invoice, so the buyer may ask for a corrected one.
How do I check a business's ABN?
Use ABN Lookup, the free public search run by the Australian Business Register. It shows whether an ABN is active, the entity name and whether the business is registered for GST and from when. Checking a supplier's ABN before paying is a sensible routine for any business.
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