What is PAYG?

Employers have a role to play in helping their employees meet their end of year tax liabilities. This is done by collecting Pay As You Go (PAYG) withholding amounts from payments in the form of salaries and wages. The withheld amounts are remitted by the employer directly to the ATO.

When do I need to register for PAYG?

If your entity plans to pay salaries and wages (including to Directors), you will need to register for PAYG.

What is GST?

Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Entities registered for GST will include GST in the price they charge which is to be remitted to the ATO on a periodic basis, and claim credits from the ATO for the GST they have paid for goods and services they buy.

When do I need to register for GST?

If your entity’s turnover is $75,000 or greater per year (or $150,000 for non-profit organisations), or you provide taxi travel including ride-sourcing, you will need to register for GST.

If you earn less than the GST threshold, you may also apply voluntarily. Many business’ do this to take advantage of the GST credits available.

What does it mean if the Company intends to account for GST on a cash basis?

There are two methods of accounting for GST – cash and accrual.

Accounting for GST on a cash basis means you account for GST in the period that you receive the money or make the payment. You can only use the cash accounting method if you are a small business entity earning an aggregated turnover of less than $10 million, are not carrying on a business but your turnover is $2 million or less, account for income tax on a cash basis and/or you run a kind of enterprise that the ATO has agreed can account for GST on a cash basis regardless of turnover.

The alternative accounting method, accrual accounting, means that you account for GST during the period that you issued the invoice or were billed, regardless of whether payment has been received or made.

What is a TFN?

A tax file number (TFN) is a unique identifier issued by the Australian Taxation Office (ATO) to each taxpaying entity – individuals, companies, SMSFs, partnerships and trusts. TFNs were initially introduced to facilitate file tracking at the ATO but have since been expanded to encompass income and other data matching. They are a 9 digit number and may only be recorded or used specifically for authorised tax-related purposes.

When do I need to register for a TFN?

Any entity that plans to make an income will need to register for a TFN. If you are unsure, we suggest seeking professional legal or financial advice prior to lodging your application.

What information will you need from me?

We will need information regarding:

ABN/TFN Registration:

  • Details of the entity including name and contact details
  • The business’ general activities
  • Authorised contact details (these are the individuals who are permitted to liaise with the ATO on behalf of the entity)
  • Associate details (these are the individuals and organisations who play a role in the entity)
    • Associate Individuals
      - Legal name
      - Date of birth
      - Position(s)
      - TFN or residential address
    • Associate Organisations:
      - Legal name
      - ACN, ARBN or ABN if applicable
      - TFN or address and date of incorporation

GST Registration:

  • Estimated annual sales turnover
  • Desired GST reporting period (monthly, quarterly or annually)
    NB not all options are available to all entities.

PAYG Registration:

  • Estimated number of employees (including directors receiving a salary)
  • Estimated amount of income tax to be withheld
What happens if an associated individual or organisation is a foreign person or entity?

For ABN applications that include associated foreign persons or organisations, there can be significant delays from the ABR's end in obtaining the ABN.

The only way to verify a foreign person’s identity is to have copies of their identification documents certified by a Notary Public of their country of residence posted to the ABR - they cannot be scanned and emailed. The certification must be pen to paper. To certify a foreign organisation, the ABR requires their country's equivalent of ASIC's Certificate of Incorporation posted to them. Along with these documents, the company applying for the ABN will also need to include a statement of business activities that the ABR can review.

Once this package is received by the ABR, they will be able to verify the foreign entities identity and as such, provide the ABN.

Do I need to provide the TFN’s of the individuals involved in the company that I am trying to register an ABN for?

Providing the Tax File Numbers (TFNs) for associate individuals and/or organisations of the company currently applying for an ABN is a way to expedite the process, however the ABR does not require the TFN’s to validate a person’s identity. In some circumstances, their address will suffice if it is the same address currently listed on their TFN documents. In our experience however, if an associate individual or organisation does not provide their TFN, or their details  don’t match TFN documents, we have found that an ABN will either be refused at the time of submitting the application or the company can face delays in obtaining their ABN - sometimes up to 28 days. It is for this reason, while it is not mandatory, we do strongly suggest providing the TFNs.

Do I get my ABN at the same time as my ACN?

Unfortunately no, our system is not currently integrated to run both applications concurrently. To get an ACN, our system needs to speak with ASIC, whereas to get an ABN, we have to apply to the ABR, a separate government entity.

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