If you’re setting up a business in Australia, you’ll need a tax file number (TFN). This is a unique tax identification number the Australian Taxation Office (ATO) issues to identify a taxpayer within its systems. You can obtain one through the TFN system. Companies, trusts, and partnerships can hold their own TFNs, separate from those of their directors, trustees, partners, or other individuals.

As of June 2025, there are more than 2.7 million businesses in Australia, each of which needs a TFN. Below, we’ll explore what a TFN does, how it differs from an Australian Business Number (ABN), and what happens financially when an entity doesn’t have one on file.

Key takeaways

• A TFN identifies a taxpayer for tax purposes; an ABN identifies a business in its dealings with other businesses and the ATO.

• In some cases, banks and other businesses must withhold tax at the top marginal rate when a required TFN or ABN hasn’t been provided.

• Companies, trusts, and partnerships each need their own TFN, separate from the TFNs of the people who run them.

What is an Australian tax file number?

An Australian tax file number is an eight- or nine-digit number the ATO issues to identify a taxpayer for life, whether that holder is a person or a legal entity such as a company, trust, or partnership. It works much like a tax identification number in other countries and lets the ATO match income, deductions, and tax payments in Australia to the right taxpayer year after year.

What’s the difference between a TFN and an ABN?

A TFN and an ABN solve different problems, and businesses usually need both. Individuals can apply for a TFN with the ATO; businesses apply with the Australian Business Register, which the ATO also administers, for their own TFNs and ABNs.

ABNs identify a business in its dealings with other commercial parties, government agencies, and for goods and services tax (GST) purposes. A TFN supports income tax assessment and reporting; an ABN supports invoicing, GST registration, and business identification in commercial transactions. Both individuals and eligible entities can hold TFNs. ABNs are limited to entities that carry on an enterprise, such as a property lease or nonprofit, qualify for ABNs.

A TFN is sensitive personal information and generally stays private. It’s shared in required contexts such as employment and banking. An ABN is public by design and searchable through the ABN Lookup tool.

How do TFNs work for individuals and businesses?

Individuals get a TFN once, often around their first job or first tax return, and it stays with them for life. Employers use it for Single Touch Payroll reporting; banks use it to determine how interest is taxed; and the ATO uses it to prefill a return with income already reported by employers and financial institutions before the filer opens the form.

Businesses work differently depending on their structures:

• Sole traders use their personal TFNs: A sole trader can simply use their individual TFN. Business income appears on the individual’s return under their existing TFN, whether or not they also hold an ABN for invoicing.

• Companies and trusts get their own TFNs: These structures count as separate taxpayers, so each applies for a number distinct from the TFNs of their directors or trustees. This usually happens alongside ABN registration, when the entity is first established.

When do businesses need a TFN?

A business needs a TFN throughout its lifespan. Companies, trusts, and partnerships generally apply for one when they register with the ATO, often alongside ABN applications, because they’ll need one to lodge their first return. Banks often ask for a TFN when a business opens an interest-bearing account, and skipping it means the bank must withhold tax at the top marginal rate and remit it straight to the ATO instead of crediting the full amount. A TFN is required any time the business lodges a filing, whether that’s an annual company return or a partnership filing that passes tax obligations through to individual partners.

What are the risks of not managing a TFN correctly?

If a business holds a term deposit or an interest-earning account without a TFN on file, its bank will withhold tax at the top marginal rate from any interest generated. Similarly, if an invoice doesn’t quote an ABN, a payer must withhold tax at the highest rate from any payment over $75 Australian dollars (AUD), excluding GST. In both cases, some cash will go to the ATO rather than the business, and it will come back as a credit after the annual filing is lodged and processed—sometimes months after the interest was earned.

This can also create additional administrative work through back-and-forth with the ATO. If a company’s TFN details don’t match ATO records, whether due to a data entry error at registration or a structural change that wasn’t updated, tax returns can bounce.

TFNs are legally protected under Australian privacy law. A business that stores employees’ or customers’ TFN data insecurely or discloses it without proper authorization can face consequences for noncompliance with privacy requirements.

How can businesses simplify financial operations that involve a TFN?

A TFN itself resides within the ATO’s systems, but businesses still need tools that accurately report income and keep tax-related identifiers where they belong. Stripe Tax helps businesses calculate and collect the right amount of tax on transactions, while Stripe Invoicing lets them issue invoices that clearly display their ABNs. This helps sidestep the withholding issue that occurs when an ABN isn’t quoted on a payment over $75 AUD.

None of this replaces registering for a TFN or keeping ATO records up to date. But once those identifiers are in place, payment and invoicing systems that reflect them accurately can minimize mismatches and consequently withholding, failed lodgments, and drawn-out correspondence with the ATO.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful API.

Stripe Tax helps you monitor your obligations and alerts you when you exceed a tax registration threshold based on your Stripe transactions. It can also register to collect tax on your behalf in the US, automate US filings in the Dashboard, and manage global filings through trusted partners. Stripe Tax automatically calculates and collects sales tax, VAT, and GST on:

• Digital goods and services in all US states and over 100 countries
  
• Physical goods in all US states and 42 countries
  

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration, or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: If you need to register for a sales tax in the US, let Stripe manage your tax registrations. You’ll benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations. If you need help registering outside of the US, Stripe partners with Taxually to help you register with local tax authorities.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax automates US filings in the Dashboard, powered by TaxJar. For global filings, Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business. US tax filings can be automated in the Stripe Dashboard, powered by TaxJar.

Learn more about Stripe Tax, or get started today.