You can legally send an invoice without an ABN, but there is a catch worth knowing before you do. If you are running a business and you leave your ABN off the invoice, the client is required to withhold 47% of the payment and send it to the ATO instead of paying it to you. So while an ABN is not strictly required to put an invoice together, in practice anyone running a business needs one to actually get paid in full. Applying for one is free and takes about fifteen minutes.
When can you invoice without an ABN?
You can invoice without an ABN when you are not carrying on a business. That covers a genuine one-off private sale, a hobby, or an activity with no real expectation of profit. In those cases the law does not require you to have an ABN, and the person paying you does not have to withhold anything, as long as you give them a completed Statement by a supplier form.
The Statement by a supplier is a short ATO form that tells the payer the legal reason you are not quoting an ABN, so they can pay you in full. You can use it if one of these applies:
the payment is $75 or less, excluding GST
the supply is a hobby or private recreational pursuit, or is wholly private or domestic
you are not carrying on a business in Australia
you are an individual or partnership with no reasonable expectation of profit
you are under 18 and the payment is $350 a week or less
A few narrower cases also qualify, such as supplies that are wholly input taxed or payments that are exempt income.
What happens if you invoice without one?
If you are running a business, none of those exceptions apply. Leave the ABN off and the client must withhold 47% of what they owe you and pay it to the ATO. You can claim that money back when you lodge your tax return, but you wait months for it, and it creates paperwork on both sides. Most clients would simply rather not deal with the hassle, so an invoice with no ABN can quietly cost you the job.
The knock-on effects matter too. Without an ABN you cannot register for GST, which means you cannot claim GST credits on your own purchases. You cannot register a business name. And to a lot of clients, an invoice with no ABN just reads as not a real business.
Does an ABN mean you have to charge GST?
No, and this trips up a lot of new sole traders. An ABN and GST are two separate things. You only charge GST once you register for GST, which becomes compulsory when your turnover reaches $75,000 a year. If you have an ABN but are not registered for GST, you send a plain invoice with no GST added, and you should not call it a tax invoice. Only GST-registered businesses issue tax invoices.
What details must a valid invoice include?
A standard invoice does not need much, but it does need to be clear. At a minimum, show your name or business name, your ABN, the date you issued it, a description of what you supplied, and the total amount owing. It is worth adding your payment terms and how you would like to be paid, such as your bank details, so there is no back and forth later.
If you are registered for GST, your invoice becomes a tax invoice and needs a little more. It must state that it is a tax invoice, show the GST amount separately or note that the total price includes GST, and for anything you sell over $1,000 it must also show the buyer’s identity or ABN. If you are not registered for GST, leave all of that off and do not use the words tax invoice.
How do you actually get an ABN?
You apply for an ABN yourself, for free, through the Australian Business Register at abr.gov.au. You need your tax file number, proof of identity, and a few details about your business, including what you do and your structure, such as sole trader. Many applications are approved on the spot. Some are held for review and can take up to 28 days if the ATO wants more information, so it pays to apply before you plan to send your first invoice rather than the night before.
Already sent an invoice without your ABN?
The fix is straightforward. Apply for the ABN, then reissue the invoice showing it, before the client pays. If they have already paid and withheld the 47%, you recover it through your next tax return, but getting the ABN onto the invoice before payment is always the cleaner route.
One warning while you are at it. An ABN is free through the Australian Business Register, so you never need to pay one of the lookalike third-party sites that charge a fee for it.
