A Tax File Number (TFN) is an eight or nine-digit number given by the Australian Taxation Office (ATO). All individuals receive a nine-digit TFN, while Australian businesses may have either an eight or nine-digit number. This TFN is an identifier used to collect income data and verify your identity, particularly for government agencies. This is one number that should remain unchanged for your lifetime, regardless of whether you change jobs, move house, or spend time working overseas.
If you’re new to the idea of a tax file number or simply want to brush up on your TFN knowledge, read on for all the foundational details.
Why do you need a tax file number?
The ATO will need to know your Tax File Number for taxation purposes. You’ll also need it if you change jobs, apply for an Australian Business Number (ABN), apply for Centrelink services or payments, apply for a student loan, or incur Pay-As-You-Go withholding tax.
The ATO data matches your TFN with other entities, such as banks, employers, public companies, superannuation funds, and Centrelink. This allows the tax office to accurately match your reported income against other paying entities, including:
- PAYG from employers, including Fringe Benefits Tax and superannuation
- Interest from banks and other financial institutions, including term deposits, bonds and debentures
- Dividends from public companies and distributions from trusts
- Unemployment information
- Health insurance information
- The purchase and sale of property
When do you need to get a TFN?
You should get a TFN when you want to work or if you need to receive governmental benefits. If you are a minor, your parents or guardian can apply for a TFN for you.
How to apply for a tax file number
If you are an Australian resident, you can apply for a TFN via an Australia Post Office, at a Department of Human Services (Centrelink) office, or by post.
Applying for a TFN at an Australia Post Office
The easiest way to apply for a TFN is to:
- Complete the online form on the ATO website
- Print out the summary and keep your application reference number
- Apply for an interview through a participating Australia Post outlet within 30 days of completing the online form
- Sign the application at the Australia Post outlet upon completion of the interview
Applying for a TFN with the Department of Human Service (Centrelink)
You can apply in person at a Centrelink office by completing the paper form “Tax File Number – application or Enquiry for Individuals” (NAT 1432). You can get a copy of the form online from the ATO website or in person at your nearest Centrelink location.
Applying for a TFN Via Post
 If you can’t get to an Australian Post outlet or Centrelink office, download the Tax file number – application or enquiry for individuals form from the ATO website or phone 1300 720 092 to have one sent to you. Send your TFN form and certified copies of your identification document to the address on the form. Just make sure you don’t send the originals as they will not return them to you.
READ: When Is My Australian Tax Return Due?
Do I need a TFN for my business?
Businesses do require a tax file number in Australia. However, if you’re operating as a sole trader, you can generally just use your individual TFN for this purpose. If you’re operating a company, partnership, or trust, you will likely need a separate TFN for your business. Once acquired, you’ll be able to give your business tax file number to investment bodies responsible for paying interest, dividends and distributions. You’ll also supply it to the ATO when the time comes to file your business tax returns.
As an operating business in Australia, you must also apply for an Australian Business Number (ABN). You can apply for your ABN and the business TFN on the Australian Business Register website. However, before you apply, you’ll need to check which type of TFN you’ll need and have details of your business activities and associates ready.Â
Are you starting a business in Australia and trying to tick off all the important establishment steps? ITP has you covered! Start with our comprehensive guide to setting up a business in Australia.
What happens if I don’t get a TFN?
If you don’t have or don’t supply a TFN to an employer, the employer will have to withhold 47% of your income as tax and remit this to the ATO. This will also happen if you don’t provide your TFN to your bank or financial institution. Any interest you earn will incur the same 47% tax rate. On top of all this, you’ll pay more tax on your superannuation contributions and won’t be able to make voluntary contributions.
The complications continue as you won’t be able to process your tax returns electronically if you don’t have a TFN. This will substantially delay the processing time for any refunds due. You may also miss out on tax claims and will need to list all your individual expenses and attach them separately to your tax return form. Finally, you won’t be able to apply for any government benefits or file a PAYG foreign resident withholding variation application.
Pro Tax Tip: The drawbacks of not having a tax file number are vast, so it’s best to sort out your TFN and all other foundational aspects of tax management upfront. If you’re at all unsure about what you need or what your obligations are, contact your nearest ITP branch today. One of our friendly certified tax accountants will be happy to answer your questions, help you get set up, and put your mind at ease.
What is a TFN exemption?
There are a few exceptions from TFN withholding for some organisations, including income tax-exempt organisations such as schools and museums, non-profit organisations, those who receive government pensions 80 years and older, children under 16 earning up to $420 per year of interest, and foreign residents for interest and franked dividends.
If you fall into one of these tax file number exception categories, you will still need to lodge a tax return. You just won’t have to state your TFN.
DOWNLOAD THIS ARTICLE What is a Tax File Number (TFN)?
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