A tax invoice issued under an ABN must show your name, your ABN, the date, a description of the work and the total payable. GST lines belong on it only if you are registered for GST. Leave the ABN off and the payer must withhold 47% of the payment.
What must every ABN invoice contain?
Five items on any invoice, whatever the amount. The name has to be the legal name registered against the ABN, not a trading name you invented.
- Your name, exactly as registered against the ABN
- Your ABN
- The date of issue
- A description of the goods or services
- The total amount payable
Once the invoice reaches $75 excluding GST and you are registered for GST, more is needed: the words Tax Invoice displayed clearly, the GST amount or a statement that the total includes GST, and for invoices of $1,000 or more, the buyer's name or ABN.
Do you need to show GST at all?
Only if you are registered, and most working holiday makers are not. Registration is required once turnover passes $75,000 in a financial year, and most backpacker ABN income sits well below that.
Showing GST when you are not registered is a real problem: you are charging a tax you cannot remit and the payer is claiming a credit they are not entitled to. Passenger rideshare is the exception and requires registration from the first dollar, which our guide to GST and ABNs explains.
What happens if you leave the ABN off?
The no ABN withholding rule requires a business paying for goods or services without a quoted ABN to withhold 47% and send it to the ATO. It applies even where you hold a valid ABN and simply forgot to put it on the invoice.
The money is not lost. It is credited against your liability and the excess comes back when the tax return is lodged. What it costs is access: on a $2,000 invoice that is $940 sitting with the ATO for months.
Why do invoices get rejected?
Almost never over tax rules, almost always over small mismatches that stop an automated system dead. Payers verify an ABN through the public ABN Lookup tool, and if the registered name does not match the invoice, it does not proceed.
- A trading name on the invoice where the ABN is registered to your personal name
- One wrong digit in the ABN, which makes it fail lookup entirely
- No invoice number, where the payer needs a unique reference
- A date written the American way rather than as DD/MM/YYYY
- No bank details, leaving a willing payer unable to pay
What actually gets you paid?
Compliant fields get an invoice accepted. Habits get it paid. The strongest is invoicing on the day the work finishes, because a late invoice from someone who has left the region is easy to ignore.
- Invoice the day the work is completed
- State payment terms explicitly, since seven days is normal for labour and silence invites thirty
- Quote the purchase order or the supervisor's name where the site uses them
- Chase in writing on the first day overdue, politely, with the invoice attached again
- Run an ABN Lookup on an unfamiliar payer before a large job, which takes seconds and shows deregistered entities
What decides whether the invoice or the arrangement is the real problem?
The invoice is paperwork. Whether you should be invoicing at all is much larger. If the business sets your hours, supervises the work and supplies the equipment, that is employment, and an invoice does not change it.
Being asked to invoice for supervised shift work is sham contracting, and it costs you the 12% superannuation, the award rate, penalty rates and workers compensation cover. Our guide to employee versus contractor status sets out the test, worth applying before the first invoice.
What should you do before you leave Australia?
Two things, neither of them the invoicing. Unpaid invoices remain legally collectable after you have gone, but recovering them from another country at backpacker scale is close to impossible, so short terms and fast chasing while you are here is the only system that works.
The second is the ABN itself, which should be cancelled when the contracting stops. Left open it generates ATO correspondence and lodgement expectations for years. Our guide to cancelling an ABN covers what to close off first.