What is a tax file number (TFN)?

Do you know what your tax file number (TFN) is and whether you need one? In this article, we explain what a TFN is as part of the Australian tax system.

What is a tax file number (TFN)?

A tax file number, or TFN, is a unique and free number assigned to you by the Australian Taxation Office (ATO). You don’t have to have a TFN, but without one you pay more tax. The ATO says your TFN is:

• an important part of your tax and super records
• an important part of your identity – make sure you keep it secure
• yours for life, even if you change your name, change jobs, move interstate or go overseas.

Why do you need a tax file number?

It’s important that you get a TFN as soon as you start working, as the ATO explains there are several restrictions if you don’t have one. No TFN? Here’s what’s not possible:

1. Applying for government benefits.
2. Lodging your tax return electronically.
3. Applying for an Australian business number (ABN).

How much tax is charged if you don’t have a tax file number?

If you don’t have a TFN but you need to pay tax in Australia, you’ll be charged additional tax. The ATO says employers must withhold 47% from any payment made to a resident employee and 45% from a foreign resident employee (ignoring any cents) when all of the following apply:

1. The employee has not quoted their TFN.
2. The employee has not claimed an exemption from quoting their TFN.
3. The employee has not advised their employer that they have applied for a TFN or have made an enquiry with the ATO.

For Australian residents, this 47% rate is higher than even Australia’s top marginal tax rate for the 2021/22 financial year and means you will likely end up paying significantly more tax than if you had a TFN.

Employers are required to complete a tax file number declaration for the ATO and share all available details they have within 14 days after an employer–employee relationship starts if an employee doesn’t supply one.

How can you get a tax file number declaration form?

Here are four different ways to get a TFN declaration form:

1. Receiving the form directly from your employer, either electronically or as a hard copy. An employer will generally give you a TFN declaration form to complete when you start in a new role.
2. Accessing a pre-filled form through ATO online services, linked to myGov (select ‘Menu’ > ‘Employment’ > ‘New employment’).
3. Downloading a TFN declaration form to complete either on screen or by hand (printed in an A4 format).
4. Getting a paper copy of the form either by ordering it online or calling 1300 720 092.

How can you apply for a tax file number?

There are different ways to apply for a TFN depending on whether you are an Australian citizen with an Australian passport, an Australian resident, a foreign passport holder, a permanent migrant or temporary visitor, or a person living outside Australia. Once you’ve accessed and completed a TFN declaration form, you can submit it to the ATO in a few ways.

Ways to submit a TFN declaration form to the ATO

1. Visit a Post Office. You can apply by completing the online application form, printing out the summary, and then taking it to an Australia Post retail outlet for an interview. You must sit the interview within 30 days of completing the online form, and will need to take proof of identity documents to the interview.
2. Go to a Services Australia service centre. If you are a Services Australia customer and are unable to get a myGovID online or apply at Australia Post, you can apply in person at a Services Australia service centre. You’ll need to complete a TFN application form, and take along proof of identity documents.
3. Submit it by post. After you’ve completed a TFN application form, mail it to the ATO’s address listed on the form. Don’t forget to include relevant copies of your identification documents.

Should you share your tax file number with your super fund?

The Australian Government says an employer is responsible for giving an employee’s TFN to their super fund within 14 days of receiving the declaration form.

However, if for some reason your super fund doesn’t already have your TFN, it could be a great idea to share it with them. Without your TFN, your super fund will tax your super at a much higher rate. Additionally, with your TFN on file, your super fund will be able to search for any lost or unclaimed super on your behalf.

Without giving your TFN to your super fund, you’ll also be unable to make after-tax contributions to your super, or receive super co-contributions from the government.

Cover image source: ymgerman/Shutterstock.com.