Tax File Numbers (TFNs)¶

A tax file number (TFN) is a person's own reference number in the tax and super systems. The ATO says a TFN is usually nine digits, and a person keeps the same one for life — even if they change jobs, change their name, or move.

When someone works for you, they give you their TFN so you can look after their tax correctly.

In one line

A tax file number is a person's own number in the tax system, and employees give it to you so you can hold back the right amount of tax.

Why this matters¶

You hold back some tax from each pay and send it to the ATO. To hold back the right amount, you need the employee's tax details, and the TFN is a key part of those details. Knowing what a TFN is helps you collect it correctly and keep it safe.

What you will learn¶

What a tax file number is
Why employees give their TFN to you
That giving a TFN is not compulsory, and what changes without one
Why you must keep a TFN private and secure

Understanding the concept¶

A TFN is unique to one person. The ATO says it is an important part of a person's tax and super records, including keeping track of their super. A person applies for a TFN once and keeps it for life.

Giving you a TFN is not compulsory. The ATO says a person is not legally required to quote their TFN. But there is a trade-off — if an employee does not give you their TFN (and does not claim an exemption), the ATO requires you to hold back tax at a higher rate. Quoting a TFN reduces the risk of having extra tax withheld.

Because a TFN is sensitive, it is protected under privacy rules. If someone gives you their TFN, you must store it securely and keep it private.

For accountants & bookkeepers

A TFN is protected under the Privacy Act 1988 and the TFN Rule, which require secure storage and disposal of TFN information. Where an employee has not quoted a TFN and has not claimed an exemption, the higher withholding rate applies.

Example¶

Jordan starts a casual job. He gives his employer his tax file number as part of his tax details. The employer records it securely and uses it to work out the tax to hold back. Because Jordan quoted his TFN, tax is held back at the normal rate for his answers, not the higher rate that applies when no TFN is provided.

Common mistakes¶

Treating a TFN like ordinary contact details — it is sensitive and must be kept private and secure.
Assuming an employee must give a TFN — it is not compulsory, but tax is held back at a higher rate without one.
Sharing or emailing a TFN in an unsafe way — store it securely instead.

How this works in myaccountant¶

In the app — you record the employee's tax file number as part of their tax details. myaccountant uses those details when it works out the tax to hold back in your pay runs, so the right amount is held back for each employee.

Key points¶

A tax file number is a person's own number in the tax system.
A person keeps the same TFN for life.
Employees give you their TFN so you can hold back the right amount of tax.
Giving a TFN is not compulsory, but tax is held back at a higher rate without one.
You must keep a TFN private and secure.

Learn next¶

General information only — not tax, super or financial advice.

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