Tax & ATO
Tax File Number
A Tax File Number (TFN) is a unique nine-digit reference number the ATO issues for life to individuals and entities for tax and superannuation. Employees quote theirs on a TFN declaration when starting a job; if an employee does not provide one, the employer must withhold tax at the top rate of 47%.
The TFN is the private backbone of the Australian tax system. Individuals apply free through the ATO (with identity checks through Australia Post, Services Australia or online for Australian passport holders), and the number is yours for life: it never changes, even if you change name, job or state, and it does not expire. Entities get their own: a company, partnership, trust or super fund applies for an entity TFN, usually at the same time as the ABN. A sole trader is the exception: the business is not a separate entity, so a sole trader uses their personal TFN for business tax and lodges everything in one individual return.
You need a TFN to lodge a tax return, start employment without penalty withholding, receive government payments, open most investment and bank accounts without withholding, and join a super fund properly. The ATO's guide to tax file numbers on ato.gov.au covers applying and recovering a lost number. The TFN's defining feature is privacy: unlike the ABN, it is never printed on invoices or public documents, and only a limited set of parties (the ATO, your employer, your bank, your super fund, your tax agent) may lawfully ask for it.
For employers, the TFN moment is onboarding. A new employee completes a TFN declaration (on paper, through ATO online services, or inside your payroll software) which tells you their TFN, residency status, and whether they claim the tax-free threshold or have a study loan. Those answers drive which PAYG withholding scale applies to every pay run afterwards, and the details flow to the ATO automatically through Single Touch Payroll.
An employee has 28 days to provide their TFN. If they still have not after that, you must withhold at the top rate: 47% for residents (the 45% top marginal rate plus 2% Medicare levy) and 45% for foreign residents, on the entire payment, with no tax-free threshold. That rule protects the system rather than punishing the worker; the over-withheld tax comes back through their tax return, but it makes for a brutal payslip in the meantime. Employers must also store TFNs securely: the Privacy (Tax File Number) Rule restricts recording, use and disclosure, and a TFN left in an unsecured spreadsheet is a notifiable-data-breach risk, not just bad practice. Estimate take-home pay under the normal scales with the OneBookPlus income tax calculator.
The TFN sits alongside the ABN and ACN, and which combination you need depends entirely on structure.
| Structure | TFN | ABN | ACN |
|---|---|---|---|
| Sole trader | Personal TFN (no separate one) | Yes | No |
| Partnership | Partnership TFN | Yes | No |
| Company (Pty Ltd) | Company TFN | Yes | Yes |
| Trust | Trust TFN | Yes (if carrying on an enterprise) | No (trustee company has one) |
Two rules of thumb keep the identifiers straight. First: TFN private, ABN public. The TFN goes on tax returns and declarations only; the ABN goes on invoices and contracts. If a customer or supplier asks for your TFN when an ABN would do, decline. Second: one entity, one TFN. Starting a company means the company needs its own TFN and lodges its own return; your personal TFN keeps handling your salary and dividends from it. Mixing the two is one of the most common bookkeeping errors when sole traders incorporate.
The definitions above only get you so far; the free OneBookPlus income tax calculator turns them into your own figures in seconds, no sign-up needed.
No. The TFN is a private nine-digit tax identifier used on tax returns, TFN declarations and super accounts. The ABN is an 11-digit public business identifier printed on invoices. A sole trader uses their personal TFN for tax and their ABN for invoicing; companies hold a separate TFN of their own.
After the 28-day grace period you must withhold at the top rate, 47% for residents, from every payment, with no tax-free threshold. The employee recovers any over-withheld tax when they lodge a return, but until they quote a TFN the high rate is mandatory.
No. A TFN is issued once and lasts for life, through name changes, breaks in employment and moves overseas. If you cannot find yours, it appears on your ATO online services account, past notices of assessment and payment summaries, or your tax agent can retrieve it.
Last reviewed and updated: by Bishal Shrestha