What the ATO expects on a tax invoice

An invoice that isn't a valid tax invoice is a problem twice over. Your customer can't claim the GST credit on it, so they send it back — and you've turned a job you finished into a conversation you have to have. Getting it right is a five-minute change to a template you use every day.

The seven things every tax invoice must show

For a sale of less than $1,000, a tax invoice has to make all of the following clear:

1. 1That it is a tax invoice. The words "Tax invoice" on the document. Not "Invoice", not "Statement".
2. 2Who is selling. Your business or trading name.
3. 3Your ABN. The eleven digits, conventionally shown in the grouped format — 51 824 753 556.
4. 4The date it was issued. Not the date of the job. The date you raised the document.
5. 5What was sold. A brief description of each item, with quantity and price. "Electrical work — $1,400" is not a description.
6. 6The GST amount. Either shown as its own line, or covered by a statement that the total price includes GST.
7. 7Which items include GST. If everything on the invoice is taxable, "Total price includes GST" does the job. If some lines aren't, each line has to show where the GST sits.

What changes at $1,000

Once the sale is $1,000 or more, one thing is added: the invoice has to identify the buyer as well — either their name or their ABN.

When you have to give one

If you're registered for GST and a customer asks for a tax invoice, the ATO says you must provide one within 28 days, unless the sale was $82.50 or less including GST. It doesn't have to be on paper: a PDF sent by email is a tax invoice as long as it carries everything above. In practice, sending a proper tax invoice for every job means nobody ever has to ask.

The mistakes that actually get invoices sent back

Calling it an "Invoice"

The single most common one, and the easiest to fix. If you are registered for GST and you are charging GST, the document has to say tax invoice. A bookkeeper processing a hundred of these a week is looking for that phrase.

A description nobody can match to a job

"Labour and materials" tells the person paying nothing. It also tells you nothing in eighteen months when someone queries the job. Itemise: what you did, how many hours, what parts went in.

GST arithmetic that doesn't add up

GST in Australia is 10%. If your subtotal is $1,400 excluding GST, the GST is $140 and the total is $1,540. The rounding errors creep in when a quote was priced GST-inclusive and then converted — decide which way your prices are quoted and keep every document consistent with it.

Zero-rated lines treated as taxable

Not everything you on-charge attracts GST. A statutory fee you pass through at cost may not. If your invoice has a mix, requirement seven applies and each line has to show its own GST treatment — a flat "includes GST" footer is wrong.

No ABN

Without your ABN on the document it isn't a tax invoice, and your customer may be required to withhold tax from the payment. This is the one that costs you money rather than time.

What about a quote?

A quote isn't a tax invoice and doesn't need to meet these rules — but the GST needs to be just as clear, because the argument you don't want is the one where the customer thought the number was inclusive and you meant it exclusive. State it on the quote, in words, next to the total.

Invoicing as a sole trader who isn't registered for GST

Everything above is for businesses registered for GST. Plenty of sole traders aren't, because they are under the $75,000 threshold (see when a tradie has to register for GST). If that's you, the rules flip:

• Don't call it a tax invoice. The ATO's guidance on setting up your business invoices says that if you're not registered for GST, your invoices should not include the words "tax invoice". Title it "Invoice".
• Don't charge GST. No GST line, and no 10% added to the price. The ATO's page on when to charge GST ties it to being registered, or required to be. If you've passed the threshold, the answer is to register, not to add 10% to an ordinary invoice.
• Do still put your ABN on it. It identifies your business, and a business customer may need it before paying you.

There is no law setting out exactly what a regular invoice has to show, as business.gov.au points out, but a sole trader invoice template that works will have:

• ✓The word "Invoice", never "Tax invoice"
• ✓Your name or business name, ABN and contact details
• ✓A unique invoice number and the date
• ✓The customer's name, or business name, and the job address
• ✓What you did, with quantities and prices
• ✓The total, with no GST line
• ✓When it's due and how to pay

Business.gov.au also notes that a business that isn't registered for GST must still give a receipt when a sale is over $75 or the customer asks for one. An invoice marked paid usually does the job.

Our free invoice template has a no-GST version set up this way: titled "Invoice", no GST line, and a note that no GST has been charged. There's a tax invoice version for when you register.

Keeping it right without thinking about it

None of this is hard. It's just seven things that have to be on a document you produce dozens of times a month, and the failure mode is that one of them quietly drops off a template and nobody notices for a quarter.

BizzMate builds the invoice from the job: your ABN and business details come from your organisation profile, the line items come from the labour and materials recorded on site, and the GST is calculated per line — so a zero-rated item stays zero-rated all the way to the PDF. The document says "Tax invoice" because it is one.

That also means BizzMate is built for businesses that are registered for GST. Every invoice it produces is titled "Tax invoice" and there is no setting to turn that off, so if you're not registered, it isn't the right tool for your invoices yet.