Who Can Apply for an ABN in 2026? The Entitlement Test, Hobbies, Employees and Refusals

Anyone can fill in the ABN application, but not everyone is entitled to the number at the end of it. The Australian Business Register checks every application against a legal test — are you carrying on or starting an enterprise? — and refuses, reviews or later cancels ABNs that don't pass. This guide is for side hustlers, new sole traders, tradies offered "ABN work", content creators, landlords and overseas businesses. It explains who can apply, how the ABR tells a business from a hobby, why employees can't get an ABN, what evidence the ABR looks for, and what to do if your application is refused, with worked examples.

Quick answer

You can apply for an ABN if you're carrying on or starting an enterprise in Australia, making supplies connected with Australia's indirect tax zone, or you're a Corporations Act company. An enterprise includes a business — commercial, repeated, profit-seeking and run in a business-like way — plus activities like leasing property, running a charity or being a super fund trustee. Employees and hobbies don't qualify.

• Starting out? Show commencement activities — quotes, a website, insurance, equipment

• Employees, apprentices and labourers aren't entitled, even if it's called contracting

• Residential landlords usually don't need an ABN

• Refused? You get a letter within 14 days and 60 days to object

• The ABN itself is free — eligibility, not cost, is the hurdle

The three ways to be entitled

The law gives three grounds for ABN entitlement. Most people rely on the first.

1. Carrying on or starting an enterprise in Australia. This covers sole traders, partnerships, trusts, companies and other entities whose activities amount to an enterprise. You don't have to be trading yet — starting counts, as long as you've taken real steps.
2. Making supplies connected with Australia's indirect tax zone. This brings in foreign businesses that sell into Australia. The indirect tax zone is Australia but not its external territories or certain offshore areas.
3. Being a company registered under the Corporations Act. A company registered with ASIC is entitled to an ABN because of its registration — it doesn't have to show it's trading.

The ABR asks questions in the application to work out whether you meet the first ground, and it warns that applying for an ABN, registering for GST and claiming GST refunds when you're not entitled can lead to prosecution. It can also review your entitlement at any time after the ABN is issued, asking you to prove you began, or took steps to begin, the enterprise from the start date you gave.

Are you entitled to an ABN?

Step 1

Corporations Act company?

yes = entitled

Step 2

Working as an employee?

yes = not for that work

Step 3

Business, leasing, charity or super fund?

an enterprise

Step 4

Started or taken real steps?

commencement activities

Step 5

Apply free

ABR or BRS

What "carrying on an enterprise" means

"Enterprise" comes from section 9-20 of the GST Act, and it's wider than "business". It includes activities done in the form of a business, and also renting or leasing property, operating a charity and acting as trustee of a super fund. It doesn't include work as an employee, private recreational pursuits or hobbies, or activities without a reasonable expectation of profit or gain carried on by individuals or partnerships of individuals.

There's no single test for whether you're carrying on a business. The ABR lists the features it looks for, and they mirror the indicators the ATO has used for decades, including in its ruling TR 97/11:

• the activity is a significant commercial activity, with commercial sales of goods or services, and of a reasonable size and scale
• there's an intention to make a profit, shown for example by a business plan — unlike a hobby
• the activity is repeated
• it's systematic, organised and business-like, and records are kept
• it's carried on in a similar way to other businesses in the same industry
• you have relevant knowledge or skill

No single indicator decides the question; they're weighed together to get an overall impression. A business can be small — a part-time dog-walking round can be a business if it's run like one — and a large activity can still be a hobby if there's no profit motive.

Hobby or business? How the indicators line up

Indicator	Points to a hobby	Points to a business
Purpose	Enjoyment, recreation	Making a profit
Sales	One-off or occasional, to friends	Regular, to the public or businesses
Organisation	Ad hoc, no records	Records, invoices, a bank account
Set-up	Uses personal gear	Licences, insurance, equipment bought for the business
Industry practice	Unlike other operators	Pricing and marketing like competitors
Plan	None	A business plan, even a simple one

Purpose

Points to a hobby

Enjoyment, recreation

Points to a business

Making a profit

Sales

Points to a hobby

One-off or occasional, to friends

Points to a business

Regular, to the public or businesses

Organisation

Points to a hobby

Ad hoc, no records

Points to a business

Records, invoices, a bank account

Set-up

Points to a hobby

Uses personal gear

Points to a business

Licences, insurance, equipment bought for the business

Industry practice

Points to a hobby

Unlike other operators

Points to a business

Pricing and marketing like competitors

Plan

Points to a hobby

None

Points to a business

A business plan, even a simple one

Starting out: commencement activities

You can get an ABN before your first sale if you're genuinely starting an enterprise. The ABR expects you to have done at least some commencement activities, and to be able to prove them. Its examples are:

• advertising, or setting up a website or social media account for the business
• buying business cards or stationery
• getting business licences or insurance, such as public liability or professional indemnity
• leasing or buying premises, equipment or stock
• issuing quotes or bidding for work
• consulting financial, business or tax advisers
• applying for finance
• buying a business

You don't need all of them. But "I'm thinking about freelancing one day" isn't an enterprise. The start date you put on your application should be the date you actually began these steps, because an entitlement review will test that date against your evidence.

Hobby or business?

Plenty of businesses start as hobbies, and the ATO's March 2026 guidance for side hustlers puts it simply: if you're starting to earn money from an activity regularly, you may be carrying on a business without realising it. Ongoing, repeated activity with the intention of making a profit — keeping records, getting licences or permits, regularly supplying goods or services — points to a business. One-off transactions, no intention of profit, or working solely as an employee point the other way.

The distinction matters in both directions. A hobby doesn't entitle you to an ABN, and money from a genuine hobby generally isn't assessable income — but you also can't claim deductions for it. Once the activity becomes a business, its profit is taxable, you're entitled to an ABN, and you can claim business expenses. The ATO has published specific guidance for content creators: earning income from ads, sponsorships, subscriptions or affiliate marketing points towards a business, while casually posting for enjoyment doesn't.

Don't apply for an ABN just to look professional or to get a discount at a trade store. If the activity isn't an enterprise, the application can be refused, and an ABN obtained on the wrong basis can be cancelled.

Signs your hobby has become a business

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• You sell regularly, not just once or twice
• You price to make a profit, not just cover materials
• You keep records of sales and costs
• You've bought equipment, stock or insurance for the activity
• You advertise or have a website or social media page for it
• You'd describe it to a stranger as your business

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Employees can't get an ABN for their job

This is the most common entitlement problem. The ABR is blunt: you're not entitled to an ABN for work you do as an employee — including as an apprentice, trade assistant or labourer — even if you or your employer call the arrangement "contracting". An employer shouldn't ask you to get an ABN as a condition of employment.

Whether you're an employee or a contractor depends on your working arrangement as a whole, not on the label anyone puts on it. Signs you're really an employee include being paid by the hour for your time rather than for a result, working only for one business under its direction, using its tools and equipment, wearing its uniform, and being unable to send someone else to do the work. The ATO's employee-or-contractor decision tool walks through the questions; our ABN for contractors guide covers them in more detail.

Being wrongly put on an ABN costs you. You lose employer super contributions, workers compensation, paid leave and award protections, and you have to handle your own tax. Sham contracting is unlawful for employers under the Fair Work Act. If you're both an employee in one job and running a genuine business on the side — say, a nurse who also runs a weekend photography business — you can hold an ABN for the side business while staying an employee in your job.

Rental property, charities, super funds and foreign businesses

Residential property. Renting or leasing property can be an enterprise, but the ABR says renting out a residential property generally doesn't give rise to GST or PAYG withholding obligations, so most residential investors don't need an ABN. Short-term accommodation run as a business can be different, so check your situation.

Commercial property. Leasing commercial premises is usually an enterprise. Commercial rent is taxable for GST, so a landlord whose commercial rent reaches A$75,000 a year must register for GST — which requires an ABN.

Charities and super funds. Operating a charity is an enterprise, and so is acting as trustee of a super fund. A super fund must be set up correctly before it applies, and APRA-regulated funds and self-managed super funds can apply for an ABN as part of their registration.

Foreign businesses. An overseas business can be entitled if it carries on an enterprise in Australia or makes supplies connected with Australia's indirect tax zone, such as selling goods or digital services to Australian customers. Non-residents have extra proof-of-identity requirements.

What happens when you apply

When you apply through the ABR or the Business Registration Service, the questions are designed to test entitlement. If your answers show an enterprise and your identity can be verified — giving your TFN helps — you get your ABN on screen immediately. If something needs checking you get a reference number, and the ABR aims to review the application within 20 business days, contacting you if it needs more information. You can watch ABN Lookup to see when it's issued, and a confirmation letter follows within 14 days.

What happens to your ABN application

Step 1

Answer entitlement questions

Step 2

Instant ABN

details verified

Step 3

Reference number

ABR review, ~20 business days

Step 4

Refusal number

letter within 14 days

Step 5

Objection

within 60 days

If your ABN application is refused

A refused application gets a refusal number, followed by a letter within 14 days giving the reasons and your options, including your review rights. Common reasons are answers describing employment, a one-off activity, an activity that hasn't started, or details that couldn't be verified.

You have three options:

• Talk to the ABR first. The ABR asks you to contact it before objecting so it can try to resolve the issue; quote the reference on your letter.
• Object. You have 60 days from receiving the decision to lodge an objection. Include a clear statement of what you're objecting to and why, plus evidence you're carrying on or starting a business — for example two recent tax invoices or quotes (ideally to different customers), invoices for materials or equipment, a business contract, a commercial lease or a business finance application. Missing evidence slows things down.
• Reapply when your situation or your answers are genuinely different — for example, after you've done commencement activities you hadn't done before. Reapplying with the same facts dressed up differently doesn't work, and the ABR contacts people who are refused several times to understand what they're doing.

If you're unhappy with the objection decision, you can apply to the Administrative Review Tribunal or appeal to the Federal Court. The same objection route applies if the ABR cancels your ABN because you're no longer carrying on an enterprise.

Evidence to attach to an objection

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• Two recent tax invoices or quotes, ideally to different customers
• Invoices or receipts for equipment, materials or stock
• A contract for the goods or services you provide
• A commercial lease or premises agreement
• Business insurance or licences
• A business website, listing or social media account
• A business finance application or business plan

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Worked examples

A weekend potter

Ana makes ceramics for fun and sells a few pieces to friends each year for about A$400. There's no business plan, no records and no regular selling, so it's a hobby: she isn't entitled to an ABN, and the money generally isn't taxable. Two years later she rents a weekly market stall, buys a kiln, takes out public liability insurance, sets prices to cover costs and a margin, and keeps sales records. Now she's carrying on a business and can apply. The market organiser wants her ABN, and without one, business customers would have to withhold 47% of what they pay her.

A labourer told to "get an ABN"

Kai is offered A$40 an hour to work as a labourer for one builder, five days a week, using the builder's tools, under the site supervisor's direction. The builder tells him to get an ABN. On the ABR's test Kai is an employee and isn't entitled to an ABN for this work. If he applies and describes the arrangement honestly, the application is likely to be refused. He should instead be paid as an employee, with super, leave and workers compensation.

A consultant starting before her first client

Tess leaves her job to start a marketing consultancy. Before her first contract she registers a domain and builds a website, buys professional indemnity insurance, prints business cards and sends quotes to three prospective clients. Those are commencement activities, so she's entitled to an ABN from the date she started them — even though she hasn't invoiced anyone yet.

A refused application turned around

Raj applied for an ABN to start a mobile car-detailing business but answered the questions as though he'd be working for one car yard. His application was refused. He rang the ABR, then lodged an objection within 60 days, attaching quotes he'd sent to two different customers, receipts for a pressure washer and products, and his public liability certificate. With that evidence of a genuine business with several customers, the refusal was reviewed.

ABN entitlement numbers (2026)

free

Cost of an ABN

20 business days

ABR review target

if you get a reference number

14 days

Refusal letter arrives within

60 days

Time to object

47%

Withholding if you don't quote an ABN

Common mistakes

Applying as an employee. Fix: check the employee-or-contractor test first; if you're an employee, you need a TFN declaration, not an ABN.

Applying before doing anything. Fix: take real commencement steps — quotes, insurance, a website — and keep the evidence.

Giving a start date you can't support. Fix: use the date you actually began commencement activities.

Reapplying with the same facts. Fix: if refused, talk to the ABR and object with evidence, or wait until your circumstances change.

Forgetting the ABN after the business stops. Fix: if you no longer carry on an enterprise, cancel the ABN — the ABR cancels inactive ABNs anyway. If your activities change but continue, update your ABN details within 28 days.

Official links

• ABR — ABN entitlementWho is entitled and commencement activities
• ABR — Applying for an ABNApply, reapply, refusals
• ABR — Objections, appeals and complaints60 days, evidence list
• ATO — Turning a hobby into income?Hobby vs business indicators
• Business Registration ServiceApply for an ABN free

What to do next

If you've decided you're running a genuine enterprise, write a one-page plan with our business plan generator, gather your commencement evidence, and follow our ABN registration guide to apply for free. Once you have the ABN, check whether you also need to register for GST.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Who is entitled to an ABN?

You're entitled to an ABN if you're carrying on or starting an enterprise in Australia, making supplies connected with Australia's indirect tax zone, or you're a company registered under the Corporations Act. An enterprise includes a business and some other activities, such as renting or leasing property, running a charity or acting as trustee of a super fund. Employees aren't entitled to an ABN for their employment.

Can I get an ABN for a hobby?

No. A hobby isn't an enterprise, so it doesn't give you ABN entitlement — and hobby money generally isn't taxable income. If the activity becomes a business — you sell regularly, aim to make a profit, keep records, get licences or insurance and run it in a business-like way — you become entitled and can apply. There's no minimum income, but one-off sales and activities with no profit motive don't count.

Can an employee get an ABN?

Not for their employment. The ABR says you're not entitled to an ABN for work you do as an employee — including as an apprentice, trade assistant or labourer — even if you or your employer call it contracting, and an employer shouldn't ask you to get an ABN as a condition of employment. You can hold an ABN for a separate genuine business you run on the side.

Why was my ABN application refused?

Usually because your answers didn't show you're carrying on or starting an enterprise — for example, you described work for a single employer, a one-off sale or an activity that hasn't started. You get a refusal number and a letter within 14 days explaining the reasons and your options. You can contact the ABR, lodge an objection within 60 days, or reapply once your answers and evidence are accurate.

Do I need an ABN to rent out my property?

Usually not for residential property. Renting or leasing property can be an enterprise, but the ABR says residential rent generally doesn't create GST or PAYG withholding obligations, so most residential investors don't need an ABN. Commercial property leasing is different: it's usually an enterprise, and landlords with commercial rent of A$75,000 or more a year must register for GST, which needs an ABN.

What evidence does the ABR ask for if it reviews my ABN?

Proof that you started, or took steps to start, your enterprise from the start date in your application. That can include invoices or quotes you've issued (ideally to different customers), receipts for equipment or stock, a business contract, a commercial lease, insurance or licences, a website or social media account for the business, or a finance application. You don't need all of these, but you need some.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.ABN entitlement — Australian Business Register · accessed 12 October 2026
2. 2.Applying for an ABN — Australian Business Register · accessed 12 October 2026
3. 3.Objections, appeals and complaints — Australian Business Register · accessed 12 October 2026
4. 4.ABN – application changes and entitlement — Australian Business Register · accessed 12 October 2026
5. 5.Turning a hobby into income? You might be in business — Australian Taxation Office · accessed 12 October 2026
6. 6.TR 97/11 Income tax: am I carrying on a business of primary production? — Australian Taxation Office · accessed 12 October 2026
7. 7.Are you in the business of content creation? — Australian Taxation Office · accessed 12 October 2026
8. 8.Register for an Australian Business Number (ABN) — business.gov.au · accessed 12 October 2026
9. 9.Registering for GST — Australian Taxation Office · accessed 12 October 2026