Many international students do not know the difference between the two, which unfortunately makes them prime targets for dishonest employers. Working under the wrong system can result in massive tax bills or legal issues with the Australian Taxation Office (ATO). Here is exactly what you need to know to protect your income and stay compliant.

What is a Tax File Number (TFN)?

A TFN is your unique personal reference number issued by the ATO. If you are hired as a standard employee (e.g., working at a supermarket, a restaurant, or an office), you are a TFN worker.

• How it works: Your employer manages your taxes for you. Every time you get paid, they automatically deduct tax from your paycheck and send it to the ATO. They also pay superannuation (retirement savings) into your account.

• The Benefit: It is safe and straightforward. At the end of the financial year, you receive a income statement, and you will likely get a tax refund when you lodge your tax return.

What is an Australian Business Number (ABN)?

An ABN identifies you as a business or an independent contractor, not an employee. If you work as a food delivery rider (like UberEats or DoorDash), a freelance designer, or an independent cleaner, you are an ABN worker.

• How it works: You are technically your own boss. Your client pays you the full invoice amount, and no tax is deducted. You are entirely responsible for calculating your own tax, setting aside money to pay the ATO at the end of the year, and managing your own insurance.

The "ABN Scam" — What to Watch Out For

A common scam in industries like construction, cleaning, and hospitality involves employers forcing international students to open an ABN to get a job.

• Why do they do it? If an employer pays you via an ABN, they legally do not have to pay you the national minimum wage, they do not have to pay you overtime or weekend penalty rates, and they completely avoid paying your superannuation or worker's compensation insurance.

• The Trap: If you accept an entry-level job under an ABN and get paid a flat rate of $20 an hour, you are being severely underpaid. Worse, at the end of the year, you will owe the ATO thousands of dollars in unpaid taxes because nothing was deducted from your weekly pay.

How to Tell if You are an Employee or a Contractor

TFN Employee (Safe Standard)

• Your manager tells you what hours to work and how to do the job.

• The business provides your uniform, computer, or tools.

• You are paid a regular hourly wage or salary.
  

ABN Contractor (Independent Business)Control

• You negotiate your own hours and choose how to complete the work.

• You bring your own commercial equipment and vehicles.

• You submit an invoice for a specific project or job.

Protect Your Rights with Everest Global

Never let an employer pressure you into getting an ABN for a regular shift-work job. If you are unsure whether a job offer is legitimate, our onshore student support teams in Sydney and Perth are always available to review your employment contracts.

By educating our students across India and our branches in Nepal (Kathmandu, Pokhara, Beni, Dhangadhi) before they arrive, Everest Global Education ensures you transition into the Australian workforce safely and securely.

Tags: #TFNvsABN #StudentJobs #TaxAustralia #ATO #WorkplaceScams #EverestGlobalEdu #InternationalStudents