Invoicing is an essential part of running a business, including as an independent contractor. It is how most businesses and independent contractors are paid.

There are 2 types of invoices:

• tax invoices
• regular invoices.

An invoice is also a record of a sale or transaction between a buyer and seller. Businesses and organisations must keep records of the invoices they issue for 5 years.

Learn more about: 

• independent contractors
• business record keeping

There are also rules about invoicing for superannuation. Learn more about super for independent contractors. 

Tax invoices

Independent contractors or businesses registered for goods and services tax (GST) can issue tax invoices. Tax invoices contain a component of GST.

Independent contractors and businesses that are registered for GST must issue a tax invoice if:

• tax (GST) is payable on what has been purchased or
• the invoice is more than $82.50 (including GST) or
• the buyer (the business customer or client) asks for a tax invoice.

Tax invoices also allow customers who have registered for GST to claim GST credits.

What goes in a tax invoice

By law, a tax invoice must include:

• the words ‘tax invoice’
• the business or independent contractor providing the service, including any registered business name
• the Australian Business Number (ABN) of the business or independent contractor
• the date the invoice is issued
• the items sold, including the quantity and price
• the GST that is payable on each item or clearly state that the total amount includes GST.

If a tax invoice is for more than $1000 it should identify the customer or show their ABN.

The ATO has some handy examples of tax invoices for sales under and over $1000.

To help businesses and independent contractors get paid, it is also good business practice to include:

• payment terms (for example, the date payment is due or the number of days the invoice needs to be paid within)
• information on how payment can be made (for example, by bank transfer and including the bank account details)
• any late payment fees that may apply
• an invoice reference number (this can help businesses and customers keep track of payments)
• any purchase order number a customer has given in relation to the services or work
• a description of the work supplied in the same terms as a quote or the original proposal
• the business contact details so customers can call if there is an issue.

Regular invoices

Regular invoices are used when the business or independent contractor issuing the invoice is not registered for GST.

A regular invoice should be titled ‘invoice’. It should not be titled ‘tax invoice’.

The invoice should say ‘no GST has been charged’ or ‘nil GST’. As GST is not payable on the goods or services the invoice relates to, GST cannot be charged.

A regular invoice should include:

• details of the business or independent contractor that is issuing the invoice — business name or independent contractor name), address, and ABN if they have
• a description of the goods or services provided, including quantity and price
• the date the invoice is issued.
• If the supplier is a hobbyist, they may provide a statement by supplier with their invoice.

Business Tasmania has a basic invoice template. Other state and territory small business agencies may also have their own. Find their details on our small business help page.