What is a TFN (Tax File Number)? Definition, Register, and Add To Your Tax Return

Tax is a necessary charge to keep countries and economies stable. However, it can be almost impossible to keep track of all individuals and companies (to tax them) without a form of identification; this is the role of a Tax File Number (TFN).

Keep reading to learn the full definition of a tax file number, how to register for one, how to add it to a tax return and more!

What Is A Tax File Number (TFN)?

A tax file number is an identification tool; it provides each individual and company with a taxable financial identity. It acts similarly to a national insurance number (for UK residents and companies) or a social security number (for US residents and companies).

It will be different depending on whether the tax file number is for an individual, a company, or an organisation. For example, if the tax file number is for an organisation, it will consist of eight digits, but if it is for an individual, it will be a nine-digit number.

The Australian Tax Office can issue a tax file number to a company or individual.

It is not a legal requirement for an individual to have a tax file number, so you could likely find someone who doesn’t have one. However, you should acquire a TFN because you can pay less tax. Additionally, you can obtain government benefits, submit an online tax return and receive an ABN (Australian Business Number).

However, every company must have a tax file number to be an operational business in Australia.

Why Does An Expat Need A TFN?

Although a TFN doesn’t seem like it would affect much, not having one can make your life far more challenging.

Here are the primary reasons why you should have a TFN.

A TFN is essential if you want to get a job. An employer will request it at one of the stages before employment, and they won’t employ you if you don’t present it.
With a TFN, you can apply for government benefits, which can be helpful if you are in a poor financial position.
You can get an Australian Business Number (ABN) if you have a TFN; this is beneficial if you have a business that you need to be eligible for tax purposes.
Not having a TFN will ultimately mean you have to pay much more tax; this applies to any money you receive from the government or your job.

How Can An Australian Expat Apply For A TFN (Tax File Number) Through The Australian Taxation Office?

If you want to apply for an individual TFN, you will need to go through the Australian Taxation Office. You will need to choose the ‘individual’ tab on the website (there are also tabs for businesses and non-profit organisations).

When you start the TFN application process, you will need to fill out several documents; the number of documents you will need to fill out will entirely depend on your circumstances. For example, if you’re an Australian expat, you must file a document containing your visa and passport details.

Applying for a TFN is the same if you have a business; again, it depends on the business type. For example, sole traders can apply for a TFN for individual and business tax purposes. However, if you have any other Australian business type, you must fill out a business TFN form.

Before filling out the application form, an expat must fulfil any of the following criteria:

You get your annual income from an Australian source. However, that source must not be royalty payments, interest, or dividends.
You have an Australian spouse (they must be a resident) who is applying for childcare subsidy or a family tax benefit.
You are a superannuation funds member, and contribute to it, receive money from it, or have someone make financial contributions on your behalf to it (superannuation funds are for employees to save money for retirement).
You have an Australian Business Number (ABN) or file a tax return in Australia.

When Will You Receive Your TFN After You Apply For It?

Usually, you will have to wait for up to 28 days after applying for your TFN. However, the wait time can depend on a few variables, including how busy the tax office is or how complex your application is.

You will receive your TFN via the post; the tax office will send the TFN to the address you put on the TFN application form.

You should call the Australian Tax Office if you don’t receive your TFN within the time they state.

What Entities Can Ask For Your Tax File Number?

Because your TFN is a form of identification, it includes specific identifiable information like your address details or date of birth. Because of the fragility of this private information, you must keep your TFN safe at all times.

Despite this, several entities may need to view your TFN (for legal reasons). Thankfully, they are the only entities that can legally ask for your TFN. For expats, this information is essential for providing for your retirement and many other reasons.

Here are the entities that can ask for your TFN.

Employers

The only time you should actively provide your TFN is when your employer needs it; you should only present your TFN to the other entities when they specifically request it.

Employers need to add your payable taxes to your monthly paychecks, so they need your TFN. Therefore, you must provide your TFN to your employer if you want to keep your position. If you’re an expat and don’t give your TFN to your employer, you can face massive fines and legal repercussions.

The Australian Tax Office

If the Australian Tax Office requests your TFN, they don’t have the necessary information to provide you with a lower tax rate.

If you don’t give your TFN to the tax office, it can result in you paying a much higher tax rate and not being able to apply for an online tax return or an Australian Business Number (ABN).

Your Bank Or A Financial Institution

Your bank or financial institution can request your TFN for similar purposes to the tax office. For example, your bank needs your TFN to ensure you don’t have to pay the highest tax rate possible; paying a high tax rate can be damaging for an expat.

To avoid paying a high tax rate (taking away from your earnings and pension), you must give your TFN to a bank or financial institution if they request it.

The Department Of Human Services

The Department Of Human Services is essential in maintaining several aspects of an Australian resident’s wellbeing (or an expat). For example, they have job services, so they might need to request your TFN.

A Retirement Fund Provider Or An Entity Requesting For Superannuation Purposes

Seeing as a retirement fund (or a fund for superannuation purposes) comes out of your earnings like your taxes, they may request to see your TFN to ensure that the split is correct.

If you don’t provide your TFN to either of these entities, you could pay more tax.

How Can You Add A Tax File Number To A Tax Return?

To ensure that you get the appropriate money back on a tax return, you must add your TFN. If you don’t add your TFN to a tax return, you will not receive the correct amount of money (or you might not receive any money if the tax office requires your TFN).

To add your TFN to a tax return, you first have to file the tax return. You can do this by:

Filing it online through the Australian Tax Office. They have a platform for tax returns called myTax, which has two-week processing after filing.
Filing it with a registered tax agent. They will ensure a hands-off process with fast processing, but they charge a significant fee for their services.

Filing a written tax return. Although the online method is generally quicker, many people will find the paper method easier.
You can add your TFN to any of these tax return methods.

What Are The Easiest Ways To Find Your TFN If You Don’t Know It?

If you’re an Australian expat and are close to securing a new job, they will request your TFN. You may worry if you don’t know your TFN, but there are several easy ways to retrieve it.

Here are the easiest ways to find your TFN if you don’t know it.

You can access it through your Australian Tax Office account (if you have an account, this is the easiest way to find a TFN).
You can find it on an income tax notice of assessment.
You can find it on an ATO letter, including the letter they sent after you applied for your TFN.
A payment summary from your employer.
An income statement from your employer.
Any statement from your superannuation account.

A Summary On What A Tax File Number Is And Its Main Uses

A tax file number is crucial when identifying you and organising your tax payments; not having one can mean you will pay more tax.

Additionally, a TFN can enable you to fill out certain forms, like an online tax return or an Australian business form.

To apply for a TFN, you can head to the Australian Taxation Office website and fill out the expat TFN form.

When you have it, several entities can request it, including your employer, bank, pension provider, and more.

You need to remember that you are better off with a TFN than without one because you can get much lower tax rates.

Frequently Asked Questions

Can A Bank Ask For Your Tax File Number?

Your bank or financial institution can ask for your TFN if they need more information to provide you with a lower tax rate.

To avoid paying a high tax rate (possibly the highest rate), you must give your TFN to a bank or financial institution if they request it.

Who Can Answer Helpful Questions About A Tax File Number?

There are other options if our TFN information cannot help answer helpful questions (questions that will help you understand TFNs).

For example, the Australian Tax Office has a lot of information on TFNS, as well as the forms to apply for them, so you may find an answer helpful). The easiest way to contact them is through their contact number.

What Will Happen If I Withhold My Tax File Number (Or I Don’t Have One)?

If you don’t have a TFN or you refuse to present to an entity, it can have serious consequences for you.

For example, if you don’t have a tax file number or you don’t present one to an employer during the application process, they will not give you a job.