Do I Need an ABN to Sell on Etsy in Australia? (2026)
Part of the guide: Do I need to register?
Not to open the shop. Etsy doesn’t ask Australian sellers for an ABN, and no Australian law makes an Australian Business Number a condition of listing on a marketplace. But once what you’re doing is a business rather than a hobby, yes — you need one, and that call belongs to the ATO and the ABR, not to Etsy.
That’s the whole answer. The rest of this article is about working out which of those two you are, because the same shop, selling the same mugs, can sit on either side of the line depending on how the selling is done — and what follows from each side is different: nothing to declare on one, a tax return with deductions on the other.
| ABN and Etsy in one line | |
|---|---|
| To open a shop or list | No ABN required — not by Etsy, not by Australian tax law |
| Once you’re in business | Yes — and the ABN is free |
| Who decides | The ATO and the ABR, on whether you’re in business — not Etsy, not your sales figure alone |
| Hobby income | Not declared, not deductible, not entitled to an ABN |
| Business income | Declared in your tax return at ordinary rates; costs deductible |
| GST | May be required at A$75,000 of turnover, within 21 days; ABN first |
| The 47% rule | Only when an Australian business pays you without an ABN — never an Etsy buyer |
| Overseas sellers | Where the stock sits when it sells decides everything |
(General information for FY 2026–27, not tax advice for your circumstances. Checked on 12 October 2026 against abr.gov.au on ABN entitlement, ato.gov.au on “Are you in business?”, registering for GST and resident tax rates, and business.gov.au on business versus hobby. Etsy’s practice is as published on its help pages, read the same day for our companion article; Etsy’s seller terms are the platform’s to state and nothing here quotes them.)
1. Do I need an ABN to sell on Etsy in Australia?
Not to open the shop. Etsy’s own list of places where a tax ID is mandatory names the EU, Norway, Switzerland and the UK — not Australia — and Australian law puts the question elsewhere. The ABR’s test has three grounds: you’re entitled to an ABN if you’re carrying on or starting an enterprise in Australia, making supplies connected with Australia’s indirect tax zone, or a Corporations Act company. If none of those describes you, you don’t need an ABN to sell on Etsy, and you’re not entitled to one either.
That last clause is the half people skip. The ABR says it plainly: “Not everyone is entitled to an ABN.” It attaches a warning with teeth — “You may face prosecution or criminal charges if you apply for an ABN, register for GST and claim GST refunds when you’re not entitled” — and it reserves the right to check later: “You may be subject to an ABN entitlement review at any time. If we conduct a review, you’ll be asked to provide evidence that you commenced, or took steps to commence, your business or enterprise from the start date provided in your ABN application.”
Getting an ABN “just in case” is therefore not harmless admin. An ABN you can’t justify is a liability, not a precaution. Our eBay and Shopify articles reach the same answer for those platforms; what differs here is what Etsy does with the number once you have one, which section 4 covers.
The 47% myth, dealt with early
Makers hear that “without an ABN they withhold 47%” and worry about their Etsy payouts. The rule is real, but it lives somewhere else. Where an Australian business pays more than A$75 (excluding GST) for a supply and the supplier hasn’t quoted an ABN, the payer must withhold 47% of the invoice. It is a rule for business payers. A buyer purchasing a mug on Etsy for themselves isn’t one, so ordinary Etsy sales aren’t in it and your payouts aren’t touched.
Where it can come up is the café that orders thirty mugs for its counter. A hobby seller doesn’t get an ABN for that; the ATO’s own example is “an artist who paints as a hobby” supplying a picture to a business, and the answer is a signed Statement by a supplier not quoting an ABN. Our article on no-ABN withholding covers that side.
2. Is my Etsy shop a hobby or a business?
The ATO’s definition is short: “a business involves a set of continuous and repeated activities you do for the purpose of making a profit.” A hobby is “a hobby or recreation from which you don’t seek to profit.” The ABR adds that there is no single test, and lists the features instead — the sharpest of which is “an intention to make a profit from the activity as demonstrated by a business plan — unlike with a hobby.”
The ATO’s own checklist (“the more of the following questions you answer yes to, the more likely it is your activities are a business”) maps onto an Etsy shop like this:
| The ATO’s question | What it looks like on Etsy |
|---|---|
| Do you intend to be in business? | You think of the shop as a business, not an outlet for what you’d make anyway |
| Do you intend to, and have a prospect of, making a profit? | Prices are set to a margin over materials and time, not “the cost of materials” |
| Is the size or scale enough to make a profit? | A stocked catalogue that could cover its costs, rather than a trickle |
| Are the activities repeated and continuous? | Making to restock, on a cycle — not clearing out what’s accumulated |
| Are they planned, organised and business-like? | Records, a separate bank account, selling to the public rather than friends, a budget, a business name |
Zoe, twice
Zoe throws mugs in Newcastle. In year one she lists twenty that she made for the joy of it and didn’t need, at A$45 each. They sell over six months, A$900 in all. She makes nothing to replace them, keeps no records, has no plan. Every question above answers no. That is a hobby: no ABN (she isn’t entitled to one), nothing to declare, nothing to deduct.
Eighteen months later she buys a A$4,000 kiln, sets a weekly production schedule, restocks the shop every week, tracks materials and sales in a spreadsheet and opens a separate bank account. Every question now answers yes. She is in business — and nothing about Etsy changed. The shop is the same shop.
When the business starts
The date matters, because it is the date the ABN runs from and the date an entitlement review will ask about. The ATO’s rule: “Your business starts when you have more than an intention to be in business. You must have actually: made the decision to start the business; acquired the minimum level of assets to start running your business; started your business activities.” For Zoe that is the week the kiln arrived and the schedule began, not the day she first listed a mug, and not the day she got round to applying.
The ATO also flags the reverse trap: if “your activity was originally a hobby, but you make arrangements” to run it as a business, you reassess. Hobbies tip into businesses gradually, and the practical marker is the moment you start making in order to sell.
3. Do you have to pay income tax on Etsy sales in Australia?
If the shop is a hobby, no: “You do not need to declare the amounts you make from your hobby to the Australian Taxation Office.” If it is a business, yes: “most income you receive is assessable for income tax purposes,” and the profit goes into your individual tax return at ordinary rates — with the costs of earning it deducted first.
The two halves travel together. The hobby maker declares nothing and also “cannot claim a deduction for any losses” — the kiln, the clay and the Etsy fees are simply spent. The maker in business declares the income and claims the expenses, as a sole trader, in the Business and professional items schedule of the ordinary return.
Zoe’s first year in business (FY 2026–27)
| Amount | |
|---|---|
| Etsy sales | A$38,000 |
| Costs: clay and glazes, Etsy fees, packaging, postage, the kiln’s decline in value | A$14,000 |
| Profit, assessable | A$24,000 |
| Part-time wages | A$40,000 |
| Taxable income | A$64,000 |
Resident rates for 2026–27 run nil to A$18,200, 15 cents to A$45,000, then A$4,020 plus 30 cents to A$135,000, before the Medicare levy of 2%. On A$40,000 of wages alone Zoe’s tax is A$3,270. On A$64,000 it is A$9,720. The Etsy profit therefore adds A$6,450 of tax, plus about A$480 of Medicare levy — call it A$6,930 — which no PAYG withholding has covered, so it is a bill at tax time rather than a refund.
Deduction is not refund
Had Zoe not claimed the A$14,000 of costs, her taxable income would be A$78,000 and the tax A$13,920. The deductions save her A$4,200 — 30% of A$14,000 — plus about A$280 of levy. They do not give her A$14,000 back, and no deduction ever does: a deduction reduces the income you’re taxed on, so its value is the amount times your marginal rate.
That is also the money reason the hobby-or-business question matters in both directions. The hobby maker is spared a return. The maker who is in business and doesn’t realise it is paying the kiln, the clay and the fees out of after-tax money for nothing.
“But I have a day job”
Irrelevant to the test. The ATO’s example on its own page is an employee who runs a business on the side; the employment is excluded from the assessment and the side activity is judged on its own. A day job doesn’t make the shop a hobby, and it doesn’t stop the profit being added to the wages.
4. When does GST come into it, and what about GST on Etsy fees?
GST is a separate line, and most makers never reach it. Registration may be required once your GST turnover is A$75,000 or more, on the current or projected test; once required, “you need to do so within 21 days”; and “before you register, you need to have an Australian business number.” Under the line, registering is optional — and for a maker selling to consumers it is usually a cost.
Zoe’s A$38,000 is well under the threshold. She could register voluntarily, but the sums rarely work: she would owe one-eleventh of her sales, A$3,455, on prices her buyers compare with every other shop’s, and recover only the GST inside her inputs — perhaps A$727 on the A$8,000 or so of her costs that carry it. That is around A$2,700 out of pocket, for a registration she must generally keep for at least 12 months. Voluntary registration pays for sellers whose costs are large and whose customers are businesses that claim the GST back; it rarely pays for a consumer-facing maker.
Etsy’s fees carry GST too
This is the one place Etsy does ask about an ABN, and it is a fee question, not a licence to sell. For shops based in Australia, Etsy adds 10% GST to its seller fees each month unless a tax ID is on file — Etsy’s “VAT ID”, which for an Australian shop means an ABN belonging to a seller who is registered for GST. With the ABN there, Etsy doesn’t charge the fee GST, on the footing that you account for it yourself. Without it, the GST appears in your Payment account with a monthly invoice.
Two consequences. Unregistered, Zoe pays about A$300 of GST on roughly A$3,000 of fees a year, and it is simply part of a deductible business expense. And she does not enter her ABN as a GST-registered business when she isn’t one: the ATO’s rule for business buyers is that you give the supplier your ABN and state that you’re registered, and “penalties can apply if you provide false information to a supplier, such as quoting an ABN when you are not GST-registered.” The mechanics — what Etsy charges, where it shows up, what the field does — are in our companion article on whether Etsy collects Australian GST.
Year three
Wholesale lines lift Zoe’s projected turnover to A$80,000. The projected test — this month plus the next eleven — catches it before the current one does, so she may need to register within 21 days of the point it became likely, as a standard registration on the ABN she already has. She charges GST within her prices, lodges a BAS, claims the GST on her inputs, and can now give Etsy her ABN as a registered business, which stops the fee GST. The A$75,000 figure isn’t indexed; confirm it before you rely on it.
5. What changes if you sell on Etsy into Australia from overseas?
One fact decides it: where your stock sits at the moment it sells. Shipped from overseas in parcels of A$1,000 or less, Etsy is the supplier for GST, collects it at checkout, and those sales don’t count toward your turnover — no Australian ABN is needed. Stock already in an Australian warehouse is your own supply, connected with Australia, and that is the ground on which an overseas seller is entitled to an ABN.
Luca makes leather goods in Milan and ships A$120 orders to Australian buyers. Etsy’s three conditions are met — seller outside Australia, package to an Australian buyer, package total of A$1,000 or less — so Etsy adds the 10% at the last step of checkout and remits it. The ATO’s rule sits behind that: where the platform is responsible for the GST, “these sales don’t count towards your GST turnover when calculating if you need to register.” Luca has no Australian registration, no ABN and no BAS, however many parcels he sends.
Then he moves A$12,000 of stock into a Sydney 3PL for faster delivery. Etsy “will not apply GST to transactions for goods located in Australia,” because they are no longer Etsy’s supplies; they are Luca’s. The ATO’s guidance for a non-resident that “imports goods and warehouses them in Australia prior to selling them online, directly or through an electronic distribution platform” is that it “will have a GST obligation for the goods sold because the goods are located in Australia.” Those sales now count toward A$75,000, together with anything he sells from his own site. If the projected total may reach the threshold he needs a standard GST registration within 21 days — simplified registration isn’t available once goods are warehoused here — on an ABN, and the A$1,200 of import GST he paid at the border becomes a credit.
The ABN itself comes from the ABR’s second ground. Its page for foreign businesses says you “may be entitled to an ABN if you are carrying on an enterprise … that involves making supplies connected with Australia’s indirect tax zone.” Luca’s supplies of goods located in Australia are exactly that. Two notes for that application: the ATO flags that non-residents face different proof-of-identity requirements, which our article on getting an ABN as a non-resident covers; and income tax is a separate question again — Australia taxes a non-resident’s business profit only through a permanent establishment, and a warehouse used to store and deliver your own goods rarely creates one. Our permanent establishment article has that test.
Where it’s worth getting help
If you’re clearly one thing or the other, this is a ten-minute job you can do yourself. A genuine hobby seller needs nothing and should apply for nothing. A maker who is plainly in business applies for the free ABN from the start date, keeps the records, and declares the profit each year.
The middle is where it’s worth a professional view:
- Has the hobby already tipped — and from when? The start date on an ABN application is a statement you may be asked to evidence, and the first return has to pick up the income from the same date.
- The first return with a day job and a side business. The profit lands on top of the wages, untaxed until the return; the deductions are only worth their marginal rate; and the kiln and the home studio each have their own rules.
- Whether to register for GST before the line. It turns on how much GST sits inside your costs and who your customers are, and it’s a twelve-month commitment.
- Overseas, with stock about to land in a 3PL. The projected test, the registration type and the ABN application all have to line up before the first consignment — and the wrong registration type is only discovered when the import GST turns out not to be claimable.
That’s the difference between doing it and doing it right the first time: the maker who registered from the right date and claimed the kiln, against the one who found out at a review that the hobby had been a business for two years.
If you’d like that looked at properly, our initial assessment form scopes it in about twelve questions — what you make, how often you restock, where it’s stored — without needing a meeting. Overseas sellers who already know they need the ABN can go straight to our ABN application page.
FY 2026–27. General information, not tax advice for your circumstances. Whether you are in business depends on your own facts taken together. The ATO, ABR and business.gov.au settings quoted are as published at 12 October 2026; resident tax rates are the ATO’s 2026–27 table. The A$75,000 GST registration turnover threshold is not indexed — confirm the current figure. Etsy’s own seller requirements and fee practice are the platform’s to state and may change.
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