You need certain licences and registrations to operate a business in Australia.
Difference between licences and registrations
A licence is something that gives you permission to operate or do certain activities, such as footpath trading, serving or selling alcohol or operating on public holidays. You usually need to abide by certain rules to hold a licence.
Licences may be granted on a local level, such as your local council, or through other authorities such as the Victorian Commission for Gambling and Liquor Regulation (VCGLR) if you intend to sell alcohol for consumption on a premises.
A registration involves giving your business's information to a relevant authority so you can complete your business operations within the law. For example:
- Registering for a tax file number with the Australian Taxation Office (ATO) allows you to carry out your tax obligations.
- Registering a business name means you can trade under a name other than your personal name.
What business licences do you need?
Use the Australian Business Licence and Information Service (ABLIS) tool to find all the local, state and federal licences, registrations and permits you need for your business.
Here are some common search terms that you can use to help you find the licences that you need:
- For hospitality service search for cafe operation, restaurant operation, takeaway food operation, mobile food van operation.
- For an electrician search for electrical installation work.
- For beauty, health and wellness business search for personal fitness training service, hairdressing services, beauty service.
- For online and other businesses search for online business, clothing accessory retailing.
What registrations do you need?
The most common business registrations are:
- Australian business number (ABN)
- tax file number (TFN)
- pay as you go (PAYG) withholding
- fringe benefits tax (FBT)
- goods and services tax (GST).
The registrations that you need for your business will depend on whether you're a sole trader or a company, partnership or trust. Check the following table to see which registrations you'll need based on your business type.
|Type of registration||Sole trader||Sole trader with employees||Partnership, trust or company without employees||Partnership, trust or company with employees|
|Australian business number (ABN)||Yes||Yes||Yes||Yes|
|Individual tax file number (TFN)||Yes||Yes||No||No|
|Business tax file number (TFN)||No||No||Yes||Yes|
|Pay as you go (PAYG) withholding||No||Yes||No||Yes|
|Fringe benefits tax (FBT)||No||Yes, if providing benefits to staff||No||Yes, if providing benefits to staff|
Goods and services tax (GST)
You must register for GST if you're a business and:
- your current or expected annual turnover is $75,000 or more (or $150,000 or more if you're a non-profit organisation), or
- you provide taxi travel.
Australian business number (ABN)
An ABN is an identification number that businesses use when when they deal with the ATO.
With an ABN you can:
- claim GST credits
- provide fringe benefits to your employees
- ask for fuel tax credits
- deal with other businesses more easily.
An ABN also avoids clients having to withhold 47% of any payments they make to you for tax purposes.
To be entitled to an ABN, you must be either:
- running a business as a sole trader, partnership or company, or
- an association, cooperative or trust.
Pay as you go (PAYG) withholding
You must register for PAYG withholding if you'll be deducting tax from employee wages. This is different to the PAYG system where you report your business and investment income in your quarterly Business Activity Statement (BAS).
You'll also need to consider employee payroll tax.
Fringe benefits tax (FBT)
You must register for FBT if you provide employee or director fringe benefits.
These could include:
- onsite accommodation
- private use of the work car
- health insurance.
Tax file number (TFN)
A TFN is a unique 9-digit number issued by the ATO. It's used for tax and other Australian Government systems.
A TFN will either be for a business or an individual, including sole traders. You can only register for one of each kind of TFN in your lifetime.
How to apply for business registrations
Get a tax file number
If you're a sole trader, apply for an individual TFN if you don't already have one.
If you're a partnership, trust or company, apply for a business TFN.
Access the Australian Business Register
Access the Australian Business Register (ABR) to apply for:
- a business or company name
- an ABN
- PAYG withholding