A Tax File Number (TFN) is an eight or nine digit number given by the Australian Taxation Office (ATO). All individuals receive a nine digit TFN and businesses may have either an eight or nine digit TFN. A TFN is an identifier used to collect income data and verify and individual or business particularly for government agencies. A TFN is allocated for the lifetime of the individual. The same TFN will be used though job changes, moving house, or even if you return after working overseas.
What do you need a TFN for?
The ATO will need to know your Tax File Number for taxation purposes, but you’ll also need it if you change jobs, apply for an Australian Business Number (ABN), apply for Centrelink services or payments, apply for a student loan and make Pay-As-You-Go withholding tax.
Your TFN will be data matched with other ATO paying entities, such as banks, employers, public companies, superannuation funds, Centrelink and others. The ATO can match reported income against other paying entities, including:
- PAYG from employers which include Fringe Benefits Tax and superannuation
- Interest from banks and other financial institutions, including term deposits, bonds and debentures
- Dividends from public companies and distributions from trusts
- Unemployment information
- Health insurance information
- The purchase and sale of property
When do you need to get a TFN?
You should get a TFN when you want to work or if you need it for governmental benefits that are to be paid to you. If you are a minor, your parents or guardian can apply for a TFN for you.
How do you apply for a TFN?
If you are an Australian resident, you can apply for a TFN via an Australia Post Office, at a Department of Human Services (Centrelink) or by post.
Australia Post Office
The easiest way to apply for a TFN is to:
- Complete this online form found in the ATO website
- Print out the summary and keep your application reference number
- Apply for an interview through a participating Australia Post outlet within 30 days of completing the online form
- Sign the application at the Australia Post outlet upon completion of the interview
Department of Human Service (Centrelink)
You can apply in person at a Centrelink by completing the paper form Tax File Number – application or Enquiry for Individuals (NAT 1432). You’ll be able to get a copy of the form online from the ATO website or go to Centrelink.
If you can’t get to an Australian Post outlet or a Centrelink office, download the Tax file number – application or enquiry for individuals form from the ATO website or phone 1300 720 092 for one to be sent to you. Send your TFN form and certified copies of your identification document to the address on the form. Make sure not to send the originals as they will not be returned to you.
Do businesses need a TFN?
Individuals as well as businesses need a TFN. When you have your TFN for your business, you’ll be able to give it to investment bodies for paying interest, dividends and trust distributions, government entities and employers.
Different business structures require a separate TFN for the business. If you’re a sole trader, you can use your personal TFN, however, companies, trusts and partnerships are required to have their own TFN.
All operating businesses must apply for an Australian Business Number (ABN). You can apply for an ABN and the business TFN on the Australian Business Register website www.abr.gov.au , but before you apply you’ll need to check which type of TFN you’ll need and have details of your business activities and associates ready.
What happens if I don’t get a TFN?
If you don’t have or don’t supply a TFN to an employer, the employer is required to withhold 47% of your income as tax and remit this to the ATO. This is also the case where a resident TFN has not been declared to your bank or financial institution. Any interest you may have earned through a financial institution will be taxed at 47%. You’ll pay more tax on your superannuation contributions and won’t be able to make voluntary contributions.
You won’t be able to process your tax returns electronically, which will substantially delay the processing time for any refunds due. You may also miss out on tax claims and will need to list all your individual expenses and attach them separately to the tax return form.
You also won’t be able to apply for any government benefits or file a PAYG foreign resident withholding variation application.
There are a few exceptions from TFN withholding for some organisations, including income tax exempt organisations such as school and/or museums, non-profit organisations, those who receive government pensions 80 years and older, children under 16 earning up to $420 per year of interest, and foreign residents for interest and franked dividends.
These exceptions will still need to lodge a tax return, but they won’t have to state their TFN.