Can You Invoice Without an ABN?

Yes, you can legally issue an invoice without an ABN in Australia. There is no law forcing you to have an ABN to send someone a bill or get paid. However, the catch is what the person paying you must do: if you are running a business (an "enterprise") and the supply is worth more than $75 excluding GST, the payer is required by ATO "no ABN withholding" rules to withhold 47% of the payment and send it to the ATO, unless you either quote an ABN or hand them a completed "Statement by a supplier" form.

So while invoicing without an ABN is allowed, it can be expensive. Below is how it actually works.

The $75 rule and the 47% withholding:

  • If you do not quote an ABN and the total payment is more than $75 (excluding GST), the payer must withhold the top rate of 47% and pay it to the ATO on your behalf.
  • If the payment is $75 or less (excluding GST), no withholding applies, even without an ABN.
  • The withheld amount is not lost forever. It is paid against your tax and you can claim it back when you lodge your tax return, but in the meantime you only receive 53 cents in the dollar. That is a serious cash flow hit.

Hobby vs enterprise (this is the key distinction):

  • An enterprise (business) is an activity done in a businesslike way with a reasonable expectation of profit, repetition, and commercial intent. If you are carrying on an enterprise, you are entitled to an ABN and should get one.
  • A hobby is something done for personal enjoyment or recreation, without the intent or structure of a business. Hobby income is generally not taxed as business income, and you cannot get an ABN for it.
  • You cannot use a hobby as an excuse to avoid an ABN if you are genuinely running a business. The ATO can review this.

The Statement by a Supplier form:

If you genuinely do not need an ABN, you can give the payer a completed "Statement by a supplier" form (free from the ATO). It lets them pay you in full without withholding 47%. Valid reasons to use it include:

  • The supply is made in the course of a private recreational pursuit or hobby.
  • The supply is wholly of a private or domestic nature.
  • You are not carrying on an enterprise in Australia.
  • You are under 18 and the payment does not exceed $350 per week.
  • There is no reasonable expectation of profit or gain.

If you are actually operating a business, you are not entitled to use this form. The honest fix is simply to apply for an ABN.

Getting a free ABN:

An ABN is completely free. Apply directly through the Australian Business Register at abr.gov.au. Avoid third party sites that charge a fee, as the official application costs nothing. Approval is often instant if your details are in order.

Important limits without an ABN:

  • You cannot register for GST without an ABN, so you cannot charge GST.
  • You cannot legally label your document a "Tax Invoice". Without GST registration it is just an "Invoice".

With InvoiceSonic you can create a clean, professional, compliant invoice in seconds, with or without an ABN. Add your ABN when you have one (and switch it to a Tax Invoice if you are GST registered), or send a plain invoice now if you are a hobbyist or just starting out.

This is general information only and not tax or legal advice. For your specific situation, check ato.gov.au or speak to a registered tax agent.

Ready to create your first invoice? Use InvoiceSonic's free invoice generator and get a professional PDF in under 2 minutes.

Create Free Invoice

Related Questions

Can I Invoice Without an ABN? Do You Need an ABN to Invoice?
← Browse all FAQs