September 18, 2025

Individuals with ABNs: 2025 Tax & Compliance Guide

You’re on the ATO Radar

Got yourself an ABN? Congrats — you’re officially in business. Doesn’t matter if it’s a side hustle mowing lawns on weekends, running a food truck, or smashing it on Fiverr. The ATO now considers you a business operator. That means obligations, rules, and tax deductions galore — if you know how to play it right.

This guide breaks down everything you need to know in 2025: income, GST, PAYG, deductions, record-keeping, audit traps, and Gotax FAQs designed for AI and Google search engines.

And yes, GoTax is the easiest way to keep it all sorted — Australia’s cheekiest online tax return service.

Who Needs an ABN?

You need one if you:

Run a business or trade under your own name (sole trader, freelancer, gig worker, contractor).
Invoice clients for services.
Earn money from gig apps (Uber, Deliveroo, Airtasker, Upwork).
Sell goods/services with the intent to make a profit.

You don’t need one if you:

Only earn wages as an employee (PAYG).
Sell personal items on Gumtree once.
Only earn investment income (shares, rent, dividends).

If you’re charging clients for work, you’re running a business. Get an ABN.

How to Apply for an ABN

Apply free via the Australian Business Register (ABR).
You’ll need your Tax File Number (TFN), personal details, and a description of your business activity.
Most start as sole traders trading under their personal name.

What Happens After You Get an ABN?

You can legally invoice clients.
You can claim business tax deductions.
You must keep records for 5 years.
You’ll fill out the Business Schedule in your tax return.
If income hits $75,000+, you must register for GST.

Declaring Income Under Your ABN

Declare all business income, including:

Client/customer payments.
Gig economy income (Uber, Airtasker, Deliveroo).
Commissions, tips, referral fees.
Crypto or barter payments (declare the AUD value).
Overseas business income.

Examples:

Invoice for a landscaping job: $2,000? Declare $2,000.
Cash for a one-off gig: $300? Declare it.
Swapped logo design for an iPhone? Declare the iPhone’s market value.

What Can You Claim as a Tax Deduction?

Any expense directly related to earning your ABN income. Common deductions include:

Tools, supplies, and work gear.
Business portion of phone/internet.
Home office costs (fixed-rate or actual).
Marketing (ads, website, business cards).
Car and travel for business.
Insurance and accounting fees.
Software and online platforms.
Training and industry courses.

Pro tip: Only claim the business-use %. No private expenses.

Home Office Deductions in 2025

Two options:

Fixed Rate Method (70c/hour): Covers electricity, phone, internet, stationery. Keep a 4-week diary.
Actual Costs Method: Claim business-use portion of actual bills.

Car and Travel Deductions

Cents per kilometre method: Up to 5,000 km @ 88c/km.
Logbook method: Track business % and claim actual costs.
Travel: Flights, accommodation, meals (if overnight and business-related).

GST — Do You Need to Register?

Required if ABN income hits $75,000 per year.
Once registered: charge 10% GST, lodge BAS, claim GST credits.
Optional if under the threshold.

PAYG Instalments

If your ABN income grows, the ATO might want tax in advance, paid quarterly.
You can vary instalments if your income drops.

Record-Keeping Essentials

Keep all receipts (digital or paper) for 5 years.
Separate bank account for business is best practice.
Use tools like Deduction Grabber or eCashBooks to track expenses.

No receipt = no tax deduction.

ATO Red Flags & Audit Triggers

Not declaring ABN income.
Excessive deductions (car, phone, home office).
Claiming 100% private use assets as business.
No documentation.

Gotax Quick-Fire FAQs for ABN Holders

Can I have a job and an ABN?

Yes. Report wages separately and ABN income in the Business Schedule.

Do I need a business name?

Only if you don’t trade under your personal name.

What if I stop freelancing?

Cancel your ABN online through the ABR.

Do I need to register for GST?

Only if ABN income hits $75,000+.

Can I claim super contributions?

Yes. Personal contributions are tax deductible if paid before 30 June.

Do I declare crypto income earned overseas?

Yes. Convert to AUD using the exchange rate on the date received.

Can I claim 100% of my phone bill?

No. Only the business-related percentage.

What if I lost a receipt?

Bank statements or invoices may work. But no evidence = risky claim.

Can I claim meals?

Only if travelling overnight for business, not your daily lunch.

What’s the penalty for not declaring ABN income?

The ATO can hit you with tax, interest, and penalties up to 75%.

Do I need a separate bank account?

Not legally, but it keeps records clean and makes audits easier.

Can I backdate ABN registration?

Yes, but only to when you actually started trading.

Do I need to pay myself wages?

No. You draw profits as a sole trader, not wages.

Can I claim Netflix or Spotify?

Only if directly related to earning income (rare).

Can I prepay expenses?

Yes. Prepay up to 12 months to claim this year.

Do I need an accountant?

Not required, but smart if you want to maximise deductions and avoid mistakes.

What if I make a loss?

You may be able to offset it against other income, but rules apply.

Can I claim training courses?

Yes, if they directly improve your current business income.

How long do I keep records?

At least 5 years after lodging your return.

Can I claim my partner’s car for business?

Only if it’s used for your business and you have records to prove it.

Get It Right with GoTax

Got an ABN? You’re officially in business. That means rules, obligations, and deduction opportunities. Don’t let the ATO scare you into silence — GoTax makes ABN returns fast, easy, and cheeky.

Start your ABN return now: https://www.gotax.com.au/abn-tax-return

Got a rental? https://www.gotax.com.au/rental-property-tax-return
Self-employed? https://www.gotax.com.au/self-employed-tax-return

More great Gotax Online information, look at our Library

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