Can you have both a TFN and an ABN at the same time?

How do the TFN and ABN work together?

The two numbers serve different purposes and are used in different situations:

• Your TFN is for: employment income, tax returns, accessing your superannuation, opening certain bank accounts
• Your ABN is for: invoicing clients for contracted work, sole trader business income, claiming business expenses

You use them in parallel. Your employer uses your TFN to deduct PAYG tax from your wages. Your clients use your ABN on the invoices you issue.

Both income streams are declared in the same tax return at the end of the financial year.

A common scenario for working holiday makers

Many working holiday makers end up with both. A typical example:

• You work part-time in a cafe as an employee, using your TFN, paid through the payroll
• On the side, you do some freelance photography, graphic design, or seasonal farm work as a contractor, invoicing under your ABN
• At tax time, both incomes are declared on the same return

This is entirely normal and legal. Most backpackers who do any contractor work alongside regular employment will be in this situation.

Common mistake: using your ABN where your TFN belongs

A frequent error is quoting an ABN to an employer who should be treating you as an employee. This causes problems because:

• The employer pays you without deducting tax
• No superannuation is paid on your behalf
• You receive no leave entitlements
• You face a larger tax bill at year end than you expected

Only use your ABN when the work genuinely is contracting (see our article on employee vs contractor for how to tell the difference). Otherwise, your TFN and a Tax File Number Declaration form are what you should provide.

What are your tax obligations when you have both?

Holding both numbers means tracking both income streams:

• Your employer reports your employment income to the ATO through their payroll
• You are responsible for tracking and declaring all income earned under your ABN
• All income, from both sources, must be included in your tax return
• The 15% working holiday maker rate applies to combined earnings up to $45,000

Keep clear records of both throughout the year. Save your payslips, copy every invoice you send, and record every payment received. Tax time is much simpler when records are complete.