The short answer
Yes, in most cases you will need an Australian Business Number (ABN) to earn commission income in Australia. If you are operating as an independent sales agent rather than an employee, you are considered a sole trader, and an ABN is required for invoicing and tax purposes.
Why you need an ABN
When you earn commission as an independent agent, you are running a small business. The businesses you sell for (your principals) will need to pay you as a contractor, and they will require an ABN on your invoices.
Without an ABN, the principal is required to withhold 47% of your earnings under the "no ABN withholding" rules. That is a massive chunk of your income held back until you sort out your tax affairs.
How to get an ABN
Getting an ABN is free and straightforward. You can apply online through the Australian Business Register (ABR) website. The process takes about 10 minutes if you have your tax file number and personal details ready.
Most applications are approved instantly or within a few days.
Do you need to register for GST?
You only need to register for GST if your annual turnover exceeds $75,000 (or you expect it to within the first year). If you are just starting out and expect to earn less than that, GST registration is optional.
However, being registered for GST can be beneficial even below the threshold because it allows you to claim GST credits on business expenses like your phone, internet, and travel.
Sole trader vs company structure
Most new agents start as sole traders. It is the simplest structure and has minimal setup costs. As your income grows, you might consider moving to a company structure for asset protection and tax planning purposes. Talk to an accountant before making this decision.
Record keeping requirements
As a sole trader, you are required to keep records of all your income and expenses. This includes:
- Commission statements from your principals
- Invoices you issue
- Receipts for business expenses
- Bank statements showing income deposits
Good record keeping makes tax time much easier and helps you understand how your business is actually performing.
Getting started on Zepys
When you sign up on Zepys, the platform handles much of the administrative side of commission tracking. Your earnings are recorded, and you can download statements for your records. But you are still responsible for your own tax obligations, so set aside 25% to 30% of your earnings for tax from day one.