If you are an independent contractor it is a requirement that you obtain an ABN as independent contractors operate under a seperate business. To be an independent contractor, rather than an employee different requirements must be met. For example, contractors must provide their own equipment, be paid on an invoice basis rather than on a salary basis and organise their own employee benefits. Thus, in the ABN application form you must select ‘in the form of a business’.
When applying for an Australian Business Number (ABN) as a contractor, it's important to accurately describe the nature of your activity. Contractors should select 'In the form of a business' on the ABN application form. This selection is crucial because independent contractors operate similarly to a separate business entity.
Unlike employees, contractors typically provide their own equipment, are paid based on invoices rather than salaries, and organize their own employee benefits. It's essential to meet these criteria to be considered an independent contractor. For further guidance, the Australian Taxation Office (ATO) provides a Business Industry Code tool to help determine the most relevant industry code for your business, which can be useful when describing your main business activity in the ABN application. Always ensure that the information you provide on the ABN application accurately reflects your business operations to avoid any potential issues with your registration.
If you require more personalised advice, consider consulting a professional advisor to ensure that your ABN application is correctly filled out and that you understand the implications of the selections you make. Remember, the information provided here is general and should not replace professional advice tailored to your specific situation.