Australia ABN & GST Invoice Rules: Why the 47% No-ABN Withholding Matters
How Australian freelancers avoid the 47% No-ABN withholding tax, when to issue a Tax Invoice vs Invoice, and the $75,000 GST registration threshold explained.
Why you need an ABN even below the GST threshold
Australia has two distinct identifiers that catch freelancers off guard: the ABN (Australian Business Number, 11 digits, free, registers in 10 minutes at abr.gov.au) and GST registration. They are not the same thing.
Without an ABN, any client paying you more than $75 in a single transaction is legally required to withhold 47% of the payment and remit it to the ATO as 'No-ABN withholding'. Most corporate clients will refuse to engage you at all without an ABN — they don't want the paperwork of withholding and remitting. Registering an ABN is free and only takes 10 minutes, but it's the single most common reason Australian freelancers lose B2B contracts.
Open the freelancer generatorGST registration: the $75,000 threshold
GST (Goods and Services Tax, 10%) registration is mandatory once your business turnover exceeds $75,000 in any rolling 12-month period, or if you drive a taxi regardless of turnover. Below that, you can choose to register voluntarily or operate as a 'small supplier' without GST registration.
Voluntary GST registration makes sense for most freelancers earning $30,000+ because it unlocks input tax credits (ITCs) — you can claim back the GST paid on your business purchases (laptop, software, contractor invoices). The net effect is usually positive, since most freelancers have substantial business expenses.
Tax Invoice vs Invoice: a legal distinction
Under Australian GST law, a 'Tax Invoice' is a specific document with required elements. If you are GST-registered and the sale (including GST) is $82.50 or more, you must issue a document titled 'Tax Invoice' that includes your ABN, the GST amount (or a statement that the total includes GST), and the date.
A regular 'Invoice' without those elements is not legally valid for GST purposes — the buyer cannot claim the input tax credit, and the ATO may treat the transaction as if no tax invoice was issued. This is the most common error caught in ATO audits. The country-specific invoice generator formats Australian documents as 'Tax Invoice' by default when GST is enabled.
BSB and account number for direct deposit
Australian direct deposit payments use BSB (Bank State Branch, 6 digits) plus account number (up to 10 digits), not IBAN. The BSB identifies the bank branch and is required for all Australian bank transfers. Some newer systems support PayID (an email or phone number as identifier) but BSB + account number remains the standard for invoice settlement.
Your invoice should clearly show BSB and account number under 'Bank Details' so the client can pay via direct deposit without needing to follow up. For international clients, AUD SWIFT details may apply instead.