Invoice template for Australia: tax invoice or invoice without GST

Tax invoice or ordinary invoice: it depends on GST registration

Australia's version of VAT is the goods and services tax (GST), which businesses add to their prices and account for to the Australian Taxation Office (ATO). Only businesses that are registered for GST charge it, and that single fact decides which kind of invoice you send. A registered business adds GST to its taxable sales, meaning the sales GST applies to, and gives its customers tax invoices, which are invoices with a fixed set of extra details. A business that isn't registered charges no GST and sends ordinary invoices, and it must not call them tax invoices, because that name tells the customer GST has been charged.

Whether you have to register depends on your GST turnover, and the table at the top of this page gives the threshold and the deadline for applying. GST turnover is your business income rather than your profit, so a tradesperson who spends heavily on materials can pass the threshold while earning far less than it. The test also looks forward as well as back, which means one large contract can make registration compulsory even after a quiet year. The same forward look applies when you start out: A new business must register for GST if it expects its GST turnover to reach $75,000 in its first year of operation (projected GST turnover: the current month plus the next 11 months), within 21 days of becoming required to register. If a business should have registered but did not, it may have to pay GST on sales made since the date it was required to register, even if it did not include GST in the price; registration can be backdated, but by no more than 4 years unless there is fraud or evasion.

That backdating is why it pays to watch your turnover as it grows. From the date your registration takes effect, you add GST at 10% to your taxable sales, and the invoices for them become tax invoices with the details in the next section. Tell regular clients before it happens, because a price you quoted while unregistered said nothing about GST, and it's easier to agree now whether GST goes on top than to sort it out after the first invoice arrives. You can also choose to register below the threshold, as the table explains, but it commits you for some time, so decide it for your business as a whole rather than for one job.

What a tax invoice must show

A tax invoice is not a form issued by the ATO: it's your own invoice with certain details on it. Check each one against this list before you send it, keeping in mind that the last item is advice rather than law.

• Words showing that the document is intended to be a tax invoice, such as the heading 'Tax invoice' (or 'GST invoice')
• Your identity (for example your legal name or registered business name) and your ABN
• The date the invoice is issued
• A brief description of what you sold, including the quantity (if applicable) and the price
• The extent to which each sale on the invoice is taxable: if the invoice mixes taxable items with GST-free or input-taxed items, it must clearly show which items are taxable
• The GST amount payable (if any), shown separately or, if the GST is exactly one-eleventh of the total price, as the statement 'Total price includes GST'
• Sales with a total price of $1,000 or more (including GST): also the buyer's identity or ABN (an invoice that meets this requirement can be used for smaller sales too)
• Companies: the company name and, unless the ACN is part of that name, its ACN (labelled 'ACN' or 'Australian Company Number') or instead its ABN if the last 9 digits of the ABN are the ACN, on the first page (invoices are public documents under the Corporations Act 2001, ss 88A and 153)
• Prices in a foreign currency: the GST in Australian dollars, or the GST in the foreign currency plus enough information (such as the exchange rate used) to work out the GST in Australian dollars
• If your customer asks for a tax invoice for a taxable sale, you must give one within 28 days, unless the sale is $82.50 or less (including GST); it may be on paper or digital, such as an emailed PDF
• Recommended by business.gov.au but not on the legal list: a unique invoice number, your contact details, and when and how you want to be paid

The heading matters more than it looks. An invoice titled just 'Invoice' doesn't show that it's meant to be a tax invoice, so a registered business that leaves off the word 'tax' has missed the first requirement even if everything else is right. Your Australian Business Number (ABN) goes with your name, and the table above shows what the number looks like. A company also needs its company name and its Australian Company Number (ACN), the number it receives when it's registered, in the way the list sets out.

The GST can be shown in two ways, and an example makes the choice clear. Say a bookkeeper in Brisbane does $800 of work for a café: GST at 10% adds $80, so the café pays $880. The invoice can show the $80 of GST on its own line, or, because $80 is exactly the share of the total that the list describes, it can show the $880 with the statement 'Total price includes GST'. A separate GST line is clearer for most clients, and it's what the maker prints.

Two items depend on the size of the sale. Once the total reaches the amount the list gives for larger sales, the invoice must also identify your buyer or show their ABN, so the simplest habit is to name your client on every invoice, which the list says works for smaller sales too. If a customer asks you for a tax invoice, you have a set time to provide one unless the sale is very small, and an emailed PDF is fine. The recommended extras at the end aren't law, but an invoice without a number or a clear way to pay is the one that gets paid late, and our guide to payment terms explains how to word the due date.

Invoices without GST: not registered, or GST-free sales

An invoice without GST can mean two quite different things, and it helps to keep them apart. If you aren't registered, none of your invoices carry GST, because your business as a whole is outside the system. If you are registered but make a sale the law treats as GST-free, only that sale carries no GST, and everything else you sell is taxed as usual.

If you aren't registered, use the following as a checklist for an ordinary invoice. As its first line says, most of it is advice rather than law:

• No law sets out what a regular (non-tax) invoice must contain; items marked 'common practice' come from business.gov.au
• The word 'invoice': you must not use 'tax invoice'
• Show that GST was not included in the price
• Your business name and your ABN (common practice; without an ABN on the invoice, a business customer generally must withhold 47% of the payment)
• A unique invoice number (common practice)
• The date you issued the invoice (common practice)
• Your contact details: postal address, email, phone (common practice)
• A description of the goods or services sold, including quantity and price (common practice)
• When and how you want customers to pay (common practice)
• The buyer's name or business name (common practice)
• Companies: the company name and, unless the ACN is part of that name, its ACN (or its ABN if the last 9 digits of the ABN are the ACN), as on any invoice

The statement that GST wasn't included can be short and plain: the maker prints 'No GST is charged: not registered for GST.' on invoices with lines marked as not registered, which tells your client at once why there's no GST to pay. The ABN is the item that costs money if you leave it off, because a business client that receives your invoice without one generally has to keep back part of your payment, at the rate the list gives. So even if you aren't registered for GST, print your ABN on every invoice.

Being registered, on the other hand, doesn't mean every line carries GST. Some kinds of sale are GST-free by law, which is the 0% rate in the table, and whether any of yours qualify depends on your trade. The case freelancers are most likely to meet is work for clients abroad: A service supplied to a customer outside Australia is usually GST-free (no GST charged), but specific conditions apply (GST Act s 38-190). For example, a supply to a non-resident who is not in Australia when the service is done is GST-free if it is neither work physically performed on goods in Australia nor directly connected with real property in Australia, or if the non-resident acquires it for its business and is not registered (or required to be registered) for GST. That rule does not apply if the service is provided, or the agreement requires it to be provided, to another entity in Australia, unless, broadly, that entity is a GST-registered business in Australia (or one of its employees or officers).

In practice, a Melbourne developer building an app for a company in Singapore will usually charge no GST, while an architect drawing plans for a Singapore client's apartment in Sydney has to look more closely, because work directly connected with property in Australia doesn't pass the first test. If you're unsure about a particular job, settle it before you invoice, because adding GST afterwards to an invoice that has already been paid is awkward for both sides. When one invoice mixes taxable and GST-free lines, the tax invoice must show which lines are taxable, and giving each line its own GST rate does exactly that.

Keeping records and e-invoicing

Keep a copy of every invoice you issue for at least the period in the table at the top of this page, and keep the PDF you actually sent rather than something you could recreate later. The maker is an invoicing tool rather than a bookkeeping system, so it's worth knowing how it stores your work. Without an account, your browser keeps up to three invoices or quotes, which means you should download each PDF and file it with your records; a free account saves up to ten new ones a month to your account, on all your devices. An invoice you send from the maker or mark as sent is finalised and can't be changed afterwards, but one you download and send yourself stays an editable draft until you mark it, and the maker keeps no history of changes, which is one more reason the sent PDF is the copy to keep. For your accountant, the overview exports every invoice as a CSV file and summarises the tax for each quarter.

E-invoicing means sending an invoice as structured data from one accounting system to another, so it lands in the buyer's software ready to process instead of as a PDF someone has to read and type in. In Australia this happens over Peppol, an international e-invoicing network, but as the table shows, businesses don't have to use it, and a tax invoice can be a PDF sent by email. The exception in practice is the federal government, whose departments and agencies (the rules call them non-corporate Commonwealth entities) are making e-invoicing their default and, for now, pay e-invoices faster than other invoices. The rules are precise about who is covered: The government commitments apply to non-corporate Commonwealth entities; corporate Commonwealth entities and Commonwealth corporations are not in scope (they are encouraged to adopt e-invoicing). Peppol e-invoicing is for invoices between businesses and to government, not for sales to consumers. In plain terms, the commitments cover the departments and agencies themselves, but not the separate corporate bodies and companies the government owns or controls, which are only encouraged to follow, and they don't affect invoices to private customers.

If you supply those departments and agencies regularly and want to send them e-invoices, the maker can't help with that part. The PDF it makes is not an e-invoice, and it can't send invoices over Peppol, so for those invoices you'll need accounting software or a Peppol service. You don't have to send e-invoices, though: a PDF tax invoice sent by email with the details above meets the GST rules for every client, government agencies included, and the FAQ below explains how quickly agencies pay one.

Making an Australian invoice in the maker

Opened from this page, the maker is already set up for Australia: amounts in AUD, A4 paper, GST instead of VAT, and 10% as the preset rate. You enter your business details once, including your ABN, and they appear on every invoice from then on. For payment, the maker takes your BSB (the bank-state-branch number that identifies your bank and branch) and account number instead of an IBAN, because those are the details an Australian client types into their banking app. A company can put its ACN in the company registration number field.

If you're registered, the invoice is titled 'Tax invoice' when GST is charged, and the totals show the GST, which takes care of the heading and the GST amount from the list. For a GST-free line, such as qualifying work for an overseas client, set that line's rate to 0%. If you aren't registered, mark the lines as not registered, so no GST is added and the PDF carries the not-registered line quoted above. Before you download, check that the title in the preview matches your situation, because 'Tax invoice' belongs only on an invoice from a registered business.

After that, choose a saved client or add a new one, fill in the lines, and download the PDF, or with a free account send it by email or as a link your client can open. The invoice number counts up on its own, so you don't need to keep track of it. For the general steps of filling in and sending an invoice, see how to make an invoice, and if you also run a business in New Zealand, its invoices follow that country's own GST rules, explained in invoices in New Zealand.