How to Open a Business Bank Account in Australia
Opening a business bank account in Australia is mostly a 15-minute online application: you need your ABN, photo ID, and — if you're a company or trust — your registration documents. Sole traders are often approved and transacting the same day; companies and trusts usually take one to five business days while the bank verifies each director and reads the deed. Here's exactly what each structure needs, how the big four compare with the newer online accounts, and the second account that quietly saves you at BAS time.
Do you actually need one?
That depends on your structure, and the answer is genuinely different.
Sole traders and partnerships aren't legally required to have a separate business account. The ATO's guidance is that you don't have to, but it's better if you do — it lets you separate business transactions from personal ones, including cash you take out as drawings. In practice, sole traders who skip it usually end up paying a bookkeeper to untangle twelve months of mixed transactions, which costs more than the account ever would have.
Companies and trusts are a different story. A Pty Ltd company is a separate legal entity — the money belongs to the company, not to you. Running company income through your personal account makes the company's financial records (which directors are legally responsible for keeping) much harder to defend, and it's exactly the thing a liquidator or the ATO points to when arguing the company was never really run as a separate entity. Trust money has to be traceable as trust money for the same reason. If you've registered a company, open the account before the first invoice is paid.
Three reasons that apply regardless of structure:
- Bank feeds. A dedicated account feeds straight into Xero, MYOB or QuickBooks, and every line in the feed is a business line. Mixed accounts mean someone codes 400 grocery transactions to "personal" every quarter.
- Audit trail. The ATO requires you to keep records explaining your transactions for five years. A clean account is that record; a shared one requires you to reconstruct it.
- Getting paid. Customers paying "Lee Electrical" rather than "Samantha Lee" looks like a business, and larger customers' accounts payable teams will query a mismatch between the invoice and account names.
What you need to open one
Every provider runs identity verification under Australia's anti-money-laundering rules — the familiar 100-point check. Get your ID together first, then the structure-specific paperwork.
| Structure | Account is held in | What the bank will ask for |
|---|---|---|
| Sole trader | Your own legal name, often shown as "Sam Lee t/a Lee Electrical" | ABN, 100 points of photo ID, your ASIC business name registration if you have one |
| Partnership | The partnership name or the partners' names | ABN, the partnership agreement, ID for every partner who will be a signatory |
| Company | The company's full legal name and ACN | ACN and ASIC certificate of registration, company ABN, constitution (or confirmation the replaceable rules apply), ID for each director and for anyone holding 25% or more, director IDs, and a resolution appointing the signatories |
| Trust | The trustee "as trustee for" the trust | Certified copy of the trust deed and any variations, trustee details (plus the company documents if the trustee is a company), the trust's ABN, ID for the trustees |
Two things trip people up. First, an ASIC-registered business name is not a legal entity — it's a label. The account belongs to the person or company behind it, so you can't open an account in a business name alone. Second, directors need a director ID before they're appointed, and banks will ask for it. If you haven't done the setup yet, work through becoming a sole trader or your company registration first.
Big four versus online business accounts
The choice is no longer "bank or nothing". A crop of Australian and international providers now offer business transaction accounts with a BSB, account number, PayID, debit cards and accounting integrations. They're genuinely good — but they're not identical to a bank, and the difference matters most on the day something goes wrong.
| Big four bank | Online business account | |
|---|---|---|
| Monthly fee | $0 on online-only tiers, around $10 on assisted/branch tiers | Usually $0 |
| Cash and cheques | Branch and ATM deposits, with fees above a monthly free allowance | Rarely supported — there's no counter to walk into |
| Deposit guarantee | Covered by the Financial Claims Scheme up to $250,000 per account holder per ADI | Only if your money is actually held by an ADI — many aren't. Ask, and check APRA's list |
| Lending | Overdrafts and business loans, and the account history builds your case | Usually none |
| Accounting feeds | Direct Xero and MYOB feeds | Xero is near-universal; check MYOB before you commit |
| International payments | Retail exchange rate margins plus a transfer fee | Often the whole reason people switch — much tighter FX |
The Financial Claims Scheme point is worth pausing on. The $250,000 government guarantee applies per account holder per authorised deposit-taking institution, and a company or trust counts as its own account holder. If a provider isn't an ADI and doesn't hold your money with one, that protection isn't there. That's not a reason to avoid them — plenty of businesses run day-to-day on a fintech account and keep reserves at a bank — but make it a conscious choice.
Whatever you pick, confirm the accounting feed before you start using the account — retyping bank transactions by hand is the most avoidable cost in small business bookkeeping. See our comparison of accounting software for Australian businesses.
The fees to actually check
Advertised "$0 monthly fee" rarely tells the whole story. Before you apply, look at:
- Monthly account-keeping fee and what waives it. All four major banks offer a no-monthly-fee online business transaction account, with branch or assisted service at roughly $10 a month (as at September 2026). Fee schedules change, so check before you apply.
- Cash handling. Banks charge to process note and coin deposits above a free monthly allowance. For a cafe or market stall this can dwarf the account fee.
- International transfers. Compare the exchange rate margin, not just the flat fee — the margin is usually the bigger number.
- Dishonour and overdrawn fees. Cheap to avoid, expensive to discover.
- Merchant fees, if you take cards — covered below, and usually the largest banking cost a retail business has.
Open a second account: the tax account
Open two accounts on the same day, not one. The second — call it "Tax" — exists to hold money that was never yours: GST you've collected, PAYG withheld from staff wages, and a provision for your own income tax. Move the money the day it lands, and BAS day stops being an event.
Say you're a GST-registered sole trader and last quarter you banked $33,000 including GST, with $13,200 of business expenses including GST.
| Line | Working | Amount |
|---|---|---|
| GST collected on sales | $33,000 ÷ 11 | $3,000 |
| GST credits on purchases | $13,200 ÷ 11 | $1,200 |
| Net GST owed to the ATO | $3,000 − $1,200 | $1,800 |
| Sales excluding GST | $33,000 − $3,000 | $30,000 |
| Expenses excluding GST | $13,200 − $1,200 | $12,000 |
| Net profit for the quarter | $30,000 − $12,000 | $18,000 |
| Income tax provision at 30% | $18,000 × 0.30 | $5,400 |
| Total to hold in the tax account | $1,800 + $5,400 | $7,200 |
That's $7,200 out of the $33,000 that came in — about 22 cents in every dollar banked. Set up an automatic sweep of roughly that percentage on the day money arrives and you'll never be short. Your own figure will differ: the income tax percentage depends on your total taxable income and your marginal rate, so ask your accountant for a number that fits you rather than defaulting to 30%. If you're not registered for GST yet, check where the $75,000 threshold sits — you have 21 days to register once you cross it.
A third account, "Profit" or "Buffer", is a worthwhile habit once the tax account is running. More on the full system in cash flow management.
Merchant facilities: taking card payments
Your bank account and your card terminal are separate decisions — you don't have to buy both from the same provider. Standalone providers commonly charge a flat 1.4% to 1.6% of each in-person card sale with no terminal rental (as at September 2026); banks more often quote a monthly rental plus per-transaction pricing that improves with volume.
Two things to know before 1 October 2026:
- Card surcharging is being banned. From 1 October 2026, businesses can no longer surcharge customers on eftpos, Mastercard and Visa debit, prepaid and credit card payments. Diners Club, PayPal and buy-now-pay-later sit outside the ban, because the RBA doesn't designate those systems. American Express sits outside it too, but has said it will remove surcharging on its cards from the same date. If you currently pass card costs on, the fee becomes yours from that date — reprice deliberately rather than absorbing it by accident.
- Interchange caps drop the same day, which should reduce what your provider pays and, over time, what it charges you. Ask your acquirer what your effective rate will be after 1 October and get it in writing.
Turn on least-cost routing (or merchant choice routing) while you're there. It sends tap-and-go payments on dual-network debit cards down the cheaper network automatically, and domestic eftpos is typically well below the international schemes. It's opt-in and free to enable — many small businesses have simply never asked. Check settlement timing too: same-day or next-business-day settlement is normal now, and anything slower is a cash flow cost.
Keeping the account clean
- Connect the feed on day one so the account reconciles itself instead of building a backlog.
- Get a business debit card and use it for absolutely nothing personal. One coffee is a journal entry later.
- Don't take money out of a company casually. Company money isn't yours until it's paid as a wage (with PAYG withholding and 12% super guarantee), as a dividend, or as a documented loan under the ATO's Division 7A rules. Ask your accountant how to draw before you start, not at tax time.
- Keep statements for five years — the ATO's record retention period covers bank statements and deposit books as much as invoices.
- Review annually. Fee structures and FX margins move, and switching is easier than it was.
Key takeaways
- Sole traders and partnerships aren't legally required to have a separate business account, but companies and trusts effectively are — the money belongs to the entity, not to you.
- Have your ABN and 100 points of ID ready; companies also need the ACN, ASIC certificate of registration, constitution, director IDs and a signatory resolution, and trusts need a certified copy of the deed.
- All four major banks offer a $0 monthly fee online business transaction account (as at September 2026), so compare cash handling, FX margins and accounting feeds rather than the headline fee.
- Online providers are often cheaper and better for international payments, but check whether your money sits with an ADI — the $250,000 Financial Claims Scheme guarantee only applies if it does.
- Open a second "tax" account on the same day and sweep GST and your income tax provision into it as money arrives.
- From 1 October 2026 you can't surcharge eftpos, Mastercard or Visa payments, so review your pricing and turn on least-cost routing now.
Where to get help
- business.gov.au — plain-English government guides to registering and running a business.
- Australian Taxation Office (ato.gov.au) — record keeping rules, GST registration, PAYG instalments, and what counts as business versus private money.
- APRA (apra.gov.au) — the list of authorised deposit-taking institutions covered by the Financial Claims Scheme, so you can check whether a provider's accounts are guaranteed.
- Reserve Bank of Australia (rba.gov.au) — the surcharging and interchange reforms taking effect on 1 October 2026.
- Your accountant or registered BAS agent — the right tax set-aside percentage for your income, and how to draw money from a company or trust.
- Your lawyer — if you're opening for a trust and the deed's wording on trustee banking powers isn't clear.
Frequently asked questions
Do I need an ABN to open a business bank account?
In practice yes — every mainstream provider asks for an ABN (and an ACN as well if you're a company) before it will open a business account. The ABN is free from the Australian Business Register and usually issued on the spot, so get it first.
Can a sole trader use a personal bank account for business?
Legally yes — sole traders aren't required to have a separate business account. The ATO's own guidance is that you don't have to, but you should, because separating business from private spending makes your bookkeeping, BAS and any ATO review dramatically easier.
How long does it take to open a business bank account in Australia?
Sole trader accounts are often open and transacting the same day if you apply online and your identity verifies electronically. Company and trust accounts usually take one to five business days because the bank has to verify each director and read the constitution or trust deed.
How much does a business bank account cost?
Nothing, if you pick an online-only tier — all four major banks now offer a business transaction account with no monthly fee, and most of the newer online providers charge no account-keeping fee either (as at September 2026). Branch and assisted-service tiers typically run around $10 a month.
Can I open a company bank account before the company is registered?
No. The account has to be in the company's legal name, so the bank needs the ACN and the ASIC certificate of registration first. Register the company, get the director IDs sorted, then open the account before any money moves.
General information only. This guide doesn't take your personal or business circumstances into account and isn't financial, legal or tax advice. Rates and thresholds change — check the official sources linked in this guide and get qualified advice where your circumstances require it.