Tax file number - What is a tax file number (TFN)?
A tax file number (TFN) is an Australian identifier for individuals and companies for taxation and superannuation purposes.
Are you a small business owner in Australia? Read more about taxes for sole traders and small businesses in Australia.
A TFN is issued by the Australian Tax Office (ATO) to any taxpaying individual or organisation. It is an 8 digit number for organisations and non-individuals and a 9 digit number for individual personal tax.
Not all individuals have a tax file number, but all businesses and organisations require a tax file number as well as an ‘Australian Business Number (ABN)’.
A tax file number is similar to the American ‘Social Security Number’, or the UK ‘National Insurance Number’. Strict privacy laws ensure that an Australian tax file number can only be used for authorised tax-related purposes.
As an individual, you do not need a tax file number, but without one, you will pay more tax. Without a TFN, you will also not be able to apply for government benefits, submit your tax return online, or obtain an Australian Business Number.
How to apply for a tax file number
To apply for a TFN, you will need to go to the Australian Taxation Office website and navigate to either the ‘Individual’, ‘Business’, or ‘Not-for-profit’ tab.
There are different requirements and documents required based on your circumstances. You can apply for a personal TFN if you are an Australian resident, a foreigner with a temporary or long-term visa, or living outside of Australia but receiving income from an Australian source.
All businesses require a TFN, whether you’re a sole trader or limited company. If you are operating as a sole trader, then you can use your personal tax file number for both personal and business-related taxation. Any other type of business will need to apply for a separate business TFN.
You can apply for a tax file number at participating Australia Post outlets, at a Services Australia centre, or by post.
Who can ask for your tax file number?
Your tax file number is linked with personal information such as your date of birth and full name. The Australian privacy laws state how your TFN can be used, and rules for processing your TFN data. It is always a good idea to keep your TFN information in a safe place and only disclose your TFN number to entities that require it.
Only certain people and organisations can ask for your tax file number.
- Your employer
- The Australian Tax Office
- Your bank
- Department of Human Services
- Your retirement savings provider
- Your superannuation funds provider
If you are unsure about whether an organisation or person is allowed to ask for your tax file number, you can always contact the Australian Tax Office (ATO) to check.
Australian tax and invoicing software
Due to the privacy laws in Australia, a TFN should not be applied to your invoices. However, your Australian Business Number (ABN) is required on your invoices in order to make them legal. You can easily add your ABN when you set up your business details on Debitoor invoicing software.
In Australia, if your business is GST registered, your invoices must include the text ‘Tax Invoice’. If your business is not GST registered, then you can use normal invoices.
With the invoicing software, it is simple to switch GST on or off. The system will automatically input ‘Tax Invoice’ on the invoices if you are registered, and exclude it if you are not registered.