Subcontractor Invoice Template - Australia

If you're operating as a sole trader or partnership, you need an ABN to legally invoice in Australia, even if you're not yet registered for GST. An Australian Business Number is required to identify your business entity on invoices. However, if you're working through a registered business structure like a Pty Ltd company, your company's ABN appears on invoices instead. Many subcontractors register for GST voluntarily once they understand the benefits of input tax credits, regardless of their $75,000 annual turnover threshold.

An Australian subcontractor invoice must include your ABN, invoice date and number, clear payment terms, itemised description of work completed, rates and amounts, and the client's business name and address. If you're GST-registered, the GST amount and total must be separately stated with the notation 'GST'. Include your business name, contact details, and payment method instructions. The ATO expects invoices to clearly distinguish between taxable and non-taxable items. Missing any required element can affect tax deductions and create compliance issues.

List travel time and materials as separate line items with clear descriptions and rates. For example: "Travel time to site: 4 hours @ $75/hour" and "Materials and supplies: $380.00". This transparency helps clients understand what they're paying for and simplifies your record-keeping for tax purposes. If materials are marked up, use a separate line showing the markup percentage or amount. Some subcontractors include a distance-based travel charge instead of hourly rates. Always agree on travel and material rates with your client before commencing work to avoid invoice disputes.

Most Australian subcontractors use Net 14 or Net 30 payment terms, though construction industry standards often extend to Net 14 or immediate payment on completion. Specify your preferred payment method clearly: bank transfer, direct deposit, or card payment. Include your bank details or payment instructions to reduce delays. Many construction contracts require payment within 5 business days under security of payment legislation. If you're experiencing slow payments, consider earlier terms like Net 7 or payment-on-completion clauses. Include a late payment interest clause referencing the contract rate if applicable.

If you're GST-registered, add 10% GST to your total invoice amount. Show the GST separately on the invoice and include the words "GST included" or the GST amount clearly displayed. The exception: you don't charge GST on non-taxable supplies, such as some labour for certain activities. If your client is also GST-registered, they can claim the GST you charge as an input tax credit, so it doesn't increase their cost. Keep records of your GST registration status and maintain all invoices for five years. If you're not GST-registered, clearly note "No GST" on the invoice.

PAYG withholding applies when clients pay subcontractors for contractor-type services. Your client may be required to withhold 10% of your invoice amount and remit it to the ATO, reducing your payment. However, if you're GST-registered and quote your ABN, withholding doesn't apply. This rule protects the tax system by ensuring contractor income is tracked. Always quote your ABN on invoices to avoid withholding. If you're not registered for GST but your client insists on withholding, confirm the correct rate with the ATO, as it may be lower depending on your circumstances.

The ATO requires you to keep invoices and supporting documents for at least five years. This includes copies of invoices you issue, payment receipts, and correspondence relating to the work performed. Organised records are essential if you're audited and help substantiate your income claims. Store invoices digitally or in paper form in a secure location. If you claim GST deductions, ensure you retain both the invoice issued and any supporting tax documents from suppliers. Poor record-keeping can result in loss of tax deductions or penalties, so establish a system from the start of your business.

First, contact your client to clarify the issue—disagreement may stem from misunderstood scope or quality concerns. If legitimate disputes exist, offer to discuss variations or corrective work. Send a formal payment reminder if payment is simply overdue, referencing your payment terms and invoice date. Include late payment interest if your contract permits it. For serious non-payment, consider small claims court or refer to a debt recovery service. Under Australian consumer law and contract principles, clients can't simply refuse payment without valid dispute grounds. Document all communication for your records and future reference.