How to Invoice as a Contractor in Australia: ABN and GST Rules

Do I need an ABN on a contractor invoice?

Yes. An ABN identifies your business to the payer and the ATO. If you do not quote one on an invoice above $75 excluding GST, the payer must withhold 47% of the payment and send it to the ATO. Quote it even below that amount.

The ABN is free and comes from the Australian Business Register. It is separate from GST registration: you can hold an ABN and not be registered for GST. The ATO's no-ABN withholding guidance sets out the rule the payer has to follow.

The withholding rate is 47% of the gross payment. It is not a penalty the ATO charges you later; the payer takes it out before you are paid, which is why a missing ABN is felt immediately. If you also invoice Canadian clients, the Canada GST/HST guide covers the different threshold and place of supply rules.

When must an Australian contractor charge GST?

Charge GST only once you are registered. Registration is compulsory when GST turnover reaches $75,000 in a rolling twelve-month period, or $150,000 for non-profit organisations. Below that you can register voluntarily, but then you must charge 10% GST and lodge activity statements.

GST is 10% on most goods and services. Some supplies are GST-free, such as many basic foods and some health and education services. Others are input-taxed, such as residential rent and some financial supplies. Neither carries GST on the invoice, but only input-taxed supplies do not let you claim credits on related purchases.

• If you are not registered, do not show a GST line, even at 0%. Omit it.
• Once registered, the invoice must show the GST amount or state that the total includes GST.
• Keep your ABN and GST registration details current so the invoice matches the register.

What must a valid tax invoice show in Australia?

A tax invoice must be titled “Tax invoice” and show the supplier's identity and ABN, the invoice date, a description of what was supplied, the GST amount or a statement that the total includes GST, and the buyer's identity or ABN for supplies of $1,000 or more.

The title matters. A document called “Invoice” is not a tax invoice once you are GST registered, and a business customer may not be able to claim the GST credit without the correct wording.

• Your business name and ABN
• A unique, sequential invoice number
• The date the invoice was issued
• The customer's name and address, and their ABN if the supply is $1,000 or more
• A description of the goods or services and the quantity or hours
• The GST amount, shown separately or stated as included in the total
• Payment terms and how to pay

How should an Australian contractor invoice be structured for payment?

Put the invoice number, issue date, due date and total near the top, then list the work and the GST separately. Add bank details or a payment link below the total and use a consistent sequential number so the client can match the invoice to their records.

A client's accounts team looks for the same few things every time: the ABN, the invoice number, the amount and the due date. Making them easy to find is more useful than a decorative layout. State the terms plainly, such as “Net 14” or “Due on receipt”, rather than leaving the due date implied.

The Australian tax invoice template starts with the ABN field and the “Tax invoice” title already in place, so the compliance details are not an afterthought.

How do I send and follow up on an Australian contractor invoice?

Email the invoice as a PDF with the invoice number and due date in the subject line. If it is unpaid a few days after the due date, send a short reminder that repeats the number and amount. Keep a copy of every invoice and the records behind it for five years.

Most late payments are oversights rather than disputes, so a polite reminder usually resolves them. If a payment is withheld because an ABN was missing, correct the invoice and ask the payer to release the withheld amount under the ATO's rules rather than treating it as lost income.