A TFN is your personal tax number, used when an employer pays you wages and withholds tax for you. An ABN identifies you as a business, used when you invoice for work and nothing is withheld. Most working holiday makers need only a TFN. Plenty end up needing both.
What is a TFN for?
Your permanent identity with the ATO. Everyone earning income in Australia needs one, employed or self employed. It connects your wages, your withholding, your superannuation and your refund to the same person, and it never expires.
You need a TFN for anything on a payroll: wages, PAYG withholding at the working holiday maker rate, employer super contributions and lodging a return. That covers most hospitality, retail, warehouse and employed farm work.
What is an ABN for?
An eleven digit business identifier, used when you are trading as a sole trader rather than working as an employee. It lets you invoice a client, and it comes with the whole of the tax responsibility an employer would otherwise carry for you.
- You invoice for the work rather than being paid through payroll
- Nothing is withheld, so the tax falls due at assessment
- No employer superannuation is paid on your behalf
- You carry the commercial risk and generally supply your own equipment
It is common in gig work, delivery, some piece rate farm arrangements, and any job where the business asks for an invoice instead of putting you on the books. Our guide to what an ABN is sets out when that is legitimate.
Can you hold both at once?
Yes, and many working holiday makers do. The TFN is always required because it is your personal identifier, and the ABN sits alongside it for the contracting portion of your income.
What it creates is a single return with two kinds of income in it. Wages arrive with tax already withheld and ABN income arrives with none, so the withholding on the wage side often absorbs the liability on the ABN side. Our guide to holding a TFN and an ABN together covers how that interacts.
How do you tell which one applies to your job?
The test is control, not the wording of the job ad. If the business decides when you start, how the work is done and what equipment you use, that is employment and it needs a TFN. If you decide those things, invoice for a result and carry the risk of fixing your own mistakes, that is contracting and it needs an ABN.
- Employee: on the payroll, tax withheld, super paid on top, the business directs the work
- Contractor: invoices issued, gross payments, your own tax and super, you direct the work
An advertisement requiring an ABN for supervised shift work at set hours is describing employment. That is sham contracting, and our guide to employee versus contractor status explains the test and what it costs you.
What does the wrong number actually cost you?
Being on an ABN when you should be an employee costs you the 12% super your employer would have paid, the award minimum rate, penalty rates, and any workers compensation cover, and it moves the entire tax bill onto you at the end of the year.
The reverse error is cheaper but not free. Working without your TFN recorded means 45% withheld instead of 15%, and no ABN on an invoice means 47% withheld by the payer.
What decides which one you need this year?
Three facts about the work itself. Who controls how the work is done. Who supplies the equipment and carries the risk. And whether you are paid for hours or for a result.
Most working holiday years contain a mix, because a bar shift in Melbourne and a delivery round in the same month genuinely are different arrangements. What is not fine is a farm or an agency deciding for you that shift work is contracting, worth checking before the first pay run, when the super is the part that cannot be recovered easily. Get in touch if the arrangement you have been offered does not match the work you are actually doing.