A TFN or Tax File Number is your personal reference number and is needed by the Australian tax and superannuation systems. So basically, anybody working within the country must have a TFN.
If you do not have a TFN, filing your tax returns online with the Australian Taxation Office (ATO) is not possible. Although having a Tax File Number (TFN) is not mandatory, there are a lot of reasons to have it.
In this guide, we will explain everything you need to know about TFN and how to apply for one, in case you wish to.
What is a tax file number (TFN)?
TFN is a unique number or identifier that the Australian taxation office (ATO) issues and gives to individuals. It is a 9-digit number which is unique to each holder.
It is essential to get a TFN before you start working in Australia. While starting a new job, you get 28 days to provide your TFN to your employer. If you are unable to do so, the tax rate applied to your taxable income will be the maximum rate (45%).
This number is not going to change after you receive it, i.e., you have it for your life. Thus, it does not matter if you change your name, address, visa, or anything else. Your TFN will remain the same.
However, this number is confidential and should only be shared with trusted organisations.
Do I need a tax file number in Australia?
A Tax File Number (TFN) is needed for many procedures in Australia, which is why you should have one, even if it is not mandatory. Here is what you would need a TFN for:
- To open an Australian bank account
- To start a new job (employment)
- To file your taxes
- To communicate with your retirement fund or Superannuation fund and receive part of your superannuation if you leave the country.
Who may ask for your TFN (Tax File Number)?
Since TFN is a confidential number, not everybody can ask for it. Only certain individuals, agencies or organisations can ask you for your Tax File Number, such as:
- The Australian Taxation Office (ATO)
- Your Employer
- Banks or other financial institutions
- The Department of Human Services if you receive personal assistance payments, such as a pension, an allowance or benefit (this department runs the Centrelink, Medicare and child support programs and is allowed to ask for TFN in such instances)
- Retirement savings and superannuation funds account providers.
You can always check with the ATO to see if the individual, agency or organisation asking you for your TFN is allowed to ask.
Along with this, the body asking for your TFN details has to adhere to the TFN rules. They cannot record, use, pass or collect your TFN unless it is allowed under superannuation law, personal assistance or taxation.
How to get a TFN?
Here’s how you can apply for a TFN:
Get an online application form from the ATO website and complete it.
Follow it by printing the application summary and then gathering the needed identity documents that you have to present at an interview.
Now, you need to find a participating Post office near you. There are only a few selected Post offices that accept TFN applications.
The final step of this process is visiting the post office for an interview within a month of printing your application summary. You must also bring your application summary and the asked identity documents.
You should get your TFN within 20 days after this interview. The ATO will mail your Tax File Number to the postal address you filled in your application.
However, if you are an Australian resident or an Australian passport holder, you have a special option to apply for a TFN online. Using myGovID, you will receive your Tax File Number (TFN) straight away. But for this, you must be eligible as per the criteria:
- Be at least 15 years old.
- Be an Australian citizen and passport holder.
- Have one or more Australian identity documents besides a passport.
Things to remember when you are asked for your TFN
Although it may not seem like a big deal to share your TFN with an authorised individual, agency or organisation, there are a couple of things you need to know.
- When asking for your TFN, you must be told the reason why they are collecting it. They should also tell the name of the law that has given them permission to collect your TFN.
- In case you decline to give it to them, it will not be considered an offence.
- They should also let you know how the process will continue if you do not give your TFN.
Any form that needs you to tell your Tax File Number must contain this information.
What if you don’t wish to give your TFN?
There is absolutely no law that states you have to give your TFN to anybody who is allowed to ask for it. But there are some consequences, especially financial consequences, that you will have to suffer if you deny giving your TFN.
For instance, an individual who hasn’t given his employer, financial institution (like a bank) or superannuation fund may be subject to the highest marginal tax rate on interest payment or income.
Not giving you TFN will also affect whether you will receive a personal assistance payment (such as a benefit, allowance or pension).
What if you are asked for a document that contains your TFN?
Some documents may already contain your TFN. So when asked for these types of documents, you are allowed to remove your TFN or cross it before you hand it over if you do not want to share it.
An important thing to note is that even if the agency, organisation or the individual asking for your TFN is permitted to ask for it, it does not mean they must get it.
Disclaimer: The information on this website is for general purposes only and should not be relied upon for making legal or other decisions. The advice provided in this article is general in nature and is not subject to the personal financial situation and needs of any individual. Clear Tax tries to keep the information accurate and up-to-date; however, you should bear in mind with changing circumstances, the accuracy and reliability of the information will not necessarily remain the same. The information is by no means a substitute for financial advice.