How Are Businesses Classified? What is an ANZSIC Code?
In Australia, businesses are classified using the Australian and New Zealand Standard Industrial Classification (ANZSIC) system. The ANZSIC system categorizes businesses based on their primary activities and economic contribution. This classification helps government agencies collect data and analyze trends in different industries.
What is an ANZSIC Code?
An ANZSIC code is a four-digit code assigned to businesses based on their main activity. The Australian Bureau of Statistics (ABS) and other regulatory bodies use these codes to organize industries and analyze data on the economy. ANZSIC codes are also used by businesses when registering with the Australian Business Register (ABR) and other government agencies.
Example:
A retail clothing store might be classified under the ANZSIC code 4251 (Clothing Retailing). If the business expands to sell furniture, it could also fall under a separate ANZSIC code for furniture retailing.
Why is Business Classification Important?
Accurate business classification is essential for government reporting, tax assessments, and eligibility for grants and funding. It also helps investors, creditors, and regulators understand the nature of a business and its role in the economy.
How to Determine Your ANZSIC Code
When registering your business, you will need to select an ANZSIC code that best reflects your primary business activity. You can find a list of ANZSIC codes on the Australian Bureau of Statistics website, or consult with your accountant or business advisor if you are unsure which code applies to your business.
Common ANZSIC Code Categories
- Manufacturing (e.g., food manufacturing, textiles, machinery).
- Retail Trade (e.g., clothing retailing, supermarket retailing).
- Construction (e.g., residential building construction, electrical services).
- Healthcare and Social Assistance (e.g., hospitals, aged care services).
Example:
Tom owns a small café that primarily serves food and beverages. His ANZSIC code would fall under the "Cafes and Restaurants" classification. If Tom later adds a catering service as a significant part of his business, he may need to update his ANZSIC code to reflect this additional activity.
Exceptions and Multiple Business Activities
Some businesses engage in multiple activities that span different industries. In such cases, you will need to select the ANZSIC code that reflects your primary business activity. However, if your business generates significant income from multiple activities, it may be necessary to register those activities separately.
Example:
Jessica runs a business that imports and sells furniture (retail trade) while also manufacturing custom pieces (manufacturing). In this case, she may need to register separate ANZSIC codes for both retail and manufacturing activities.
If you want to understand more about how business classifications affect legal responsibilities, check out our page on ABNs and ACNs.
