What is a tax invoice and when do you need to issue one?

When is a tax invoice required?

You must issue a tax invoice when:

• The sale is worth $82.50 or more (including GST)
• The buyer requests one
• Most business clients require an invoice to process payment through their accounts system

Even when not strictly required, issuing invoices is good practice:

• Creates a clear record of what was agreed
• Documents what was delivered and when
• Supports your tax return at year-end
• Resolves payment disputes faster

What must a valid tax invoice include?

For working holiday makers under the $75,000 GST threshold, a valid invoice must show:

• Your name (and business name, if you trade under one)
• Your ABN
• The date of the invoice
• A description of the services or goods provided
• The total amount payable
• A note that GST does not apply (or that the total is GST-free)
• Your contact details

If you are registered for GST (uncommon for working holiday makers), additional requirements apply including showing the GST amount separately.

Why does quoting your ABN matter?

The "no-ABN withholding rule" applies if you invoice without a valid ABN:

• The business must withhold 45% of the payment
• You receive only 53% upfront
• The withheld amount can be reclaimed in your tax return, but you wait until year-end

Always quote your ABN on every invoice. If you do not have one yet, register through our service before you start invoicing. We typically get ABNs approved within 24 hours.

How should you keep invoice records?

Keep a copy of every invoice you issue:

• A simple spreadsheet listing each invoice (date, client, amount, paid status)
• PDF copies of each invoice in cloud storage
• Bank statements showing each payment received

When we lodge your tax return, we use these records to calculate your contractor income accurately. Without them, we have to estimate, which is less accurate and harder to defend if the ATO queries the return.

What about invoices and superannuation?

ABN contractor work typically does not generate super contributions from the client. This is one of the trade-offs of contracting:

• Employees: client pays 12% super on top of wages
• Contractors: client pays only what the invoice says

If you are doing employee-like work but invoicing as a contractor, you may be a victim of sham contracting and entitled to super. See our article on employee vs contractor for how to tell the difference.