Contractor Invoice Template - New Zealand

You must include GST on your contractor invoice if you're registered for GST, which applies to most contractors earning over $60,000 annually. GST in New Zealand is 15%, added to your service charge or quoted rate. The invoice must clearly show the GST amount separately and state your GST registration number. If you're not GST-registered, you can invoice without GST but must state "Not GST registered" on the invoice. Many clients, particularly construction companies and property developers, expect GST to be clearly itemized as they'll claim it back as an input tax credit. Always confirm your GST registration status with IRD to avoid underpaying tax obligations on your invoiced income.

Progress invoicing is standard practice for construction work in New Zealand. You invoice clients at key milestones—typically upon completion of specific phases or stages of work. For example, you might invoice after foundation work, framing, interior work, and final completion. Each progress invoice should detail the work completed during that period, materials supplied, and labor costs. This approach provides regular cash flow and clearly documents what work has been completed. Always agree on milestone dates and payment terms upfront with your client to avoid disputes. Progress invoices protect both parties by creating a clear payment schedule tied to actual work completed.

Retention (also called holdback) is a common practice in New Zealand construction where clients hold back 5-10% of your invoice value until project completion. This protects them against defects or incomplete work. Your contractor invoice should show the full service amount with retention separately itemized as a deduction. Payment is released at project completion once retention conditions are met. Always clarify retention percentages and release conditions before starting work. Some clients retain for 12 months post-completion to cover latent defects. Understanding retention helps you plan cash flow and manage expectations about final payment timing for your work.

Your contractor invoice must include your name, address, and GST registration number (if registered). Include the client's name and address, a unique invoice number, and the date issued. Describe services or work performed clearly—for example, "plumbing installation, 12 labor hours" rather than vague descriptions. Show the rate or fee, quantity, and line total for each item. Include the invoice total, GST amount (if applicable), and payment terms or due date. Your bank details for payment should be clearly displayed. For Construction Contracts Act compliance (for contracts over $20,000), include specific legislative references if applicable. These elements help prevent payment disputes and ensure tax compliance in New Zealand.

Standard payment terms for New Zealand contractors typically range from 7 to 30 days, with 14 days being most common in residential and small commercial work. Construction companies often expect 30-day terms, while larger developers may negotiate longer payment periods. Specify clearly: "Payment due within 14 days of invoice date" or similar. Some contractors require a deposit upfront, particularly for expensive materials. Late payment penalties can be specified (0.5-1% monthly on overdue amounts), though these must comply with Fair Trading and contract law. Always discuss and agree on payment terms before quoting or invoicing. Clear terms reduce disputes and set professional expectations.

Most New Zealand contractor invoices itemize materials and labor separately, allowing clients to see exact costs for supplies versus your time. Materials should be listed with descriptions, quantities, and the amount charged (often cost plus a markup of 10-20%). Labor is typically invoiced by the hour or as a flat rate for the task. This breakdown helps clients understand value and supports GST calculations. If you've invoiced for materials already purchased, make this clear. Some contractors use a single rate that includes both labor and materials, which is acceptable if agreed upfront. Transparency on materials versus labor prevents disputes and demonstrates professionalism in your invoicing approach with clients.

Yes, invoicing for deposits is standard practice for New Zealand contractors, particularly for larger projects or material purchases. Many require 25-50% upfront with the balance at completion or milestones. Create a separate invoice labeled "Deposit for [project description]" with the agreed amount and payment terms. This protects your cash flow and secures client commitment. Deposits are fully refundable if work doesn't proceed, unless you've incurred genuine expenses or the client cancels without notice. Always include deposit terms in your initial agreement and tax invoice. Invoicing for deposits professionally sets expectations and provides a paper trail. Clear deposit invoicing reduces misunderstandings and demonstrates business professionalism with new clients.

The IRD requires New Zealand contractors to retain tax records for at least seven years from the end of the financial year the invoice was issued. This includes invoices, payment receipts, and supporting documentation like quotes and client communications. Keeping detailed records ensures tax compliance and protects you during audits. Digital copies are acceptable if stored securely and remain legible. Your invoices prove income earned and help substantiate deductions for materials and work expenses. Poor record-keeping can result in penalties or tax reassessment. Establish a filing system—physical or digital—from the start of your contracting business. Organized, retained invoices demonstrate professionalism and protect your business legally and financially with the IRD.