What is an ABN and do you need one on a working holiday visa?

What is the difference between an employee and a contractor?

The need for an ABN comes down to whether you are an employee or a contractor:

• Employee: The business pays you a regular wage, deducts PAYG tax from your pay, and pays superannuation on top of your wages. You need a TFN, not an ABN.
• Contractor: The business asks you to invoice them for your work, does not deduct tax, and does not pay super on your behalf. You need an ABN.

The label your employer uses does not necessarily reflect the legal reality. The substance of the arrangement (how you are paid, who controls your hours, who provides equipment) is what determines whether you are legally an employee or a contractor.

Why are ABNs common among working holiday makers?

Several types of work that backpackers commonly do are structured as contracting arrangements rather than employment:

• Piece-rate fruit picking and harvest work through labour hire companies
• Gig economy work through platforms like Uber Eats, DoorDash, and Hireup
• Freelance creative, technical, or trade work
• Some hospitality and cleaning roles where the worker is contracted, not employed
• Tour guide work, photography, content creation

In each case, the business pays you against an invoice rather than a payslip, and an ABN is required.

What happens if you work without an ABN when you need one?

If you invoice a business without quoting a valid ABN, the business is legally required to withhold 47% from your payment before sending you the rest. This is similar to what happens to a WHM employee without a TFN (where 45% is withheld). The withheld amount can be reclaimed when you lodge your tax return, but you do not see it until then.

How do you get an ABN?

The simplest way to get an ABN is to register through our service. We handle the whole process for you:

1. Send us your details (we will let you know exactly what we need)
2. Our team prepares and lodges the registration on your behalf
3. Most ABNs are approved within 24 hours
4. You receive your ABN by email, ready to use

Registering an ABN involves describing your business activity in language the Australian Business Register accepts, choosing the right structure, and handling identity verification. Getting any of this wrong can put your application into a manual review queue that takes weeks. We do dozens of registrations every week and know exactly how to get them through first time.

What are your tax obligations under an ABN?

When you are working as a sole trader with an ABN, you are responsible for managing your own tax:

• No tax is automatically withheld from your invoices
• You must set aside enough money to cover your tax bill
• All ABN income must be included in your annual tax return
• You may need to register for GST if your turnover exceeds $75,000 per year
• You may not receive superannuation contributions from your clients (you can pay your own if you choose)

The standard working holiday maker tax rate of 15% on the first $45,000 of earnings applies to your ABN income as well, but you must self-assess and pay it at tax time rather than having it deducted upfront.