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

A tax invoice is a document that a supplier issues to a buyer to request payment for goods or services. As a working holiday maker working as a contractor with an ABN, you will need to issue tax invoices to the businesses paying you in order to receive payment correctly and to maintain the records required for your tax return.

When a tax invoice is required

If you make a sale of goods or services worth $82.50 or more (including GST), you are required to issue a tax invoice if the buyer requests one. For most contracting arrangements, the business paying you will need a tax invoice to process the payment through their accounts system. Even when not strictly required by law, issuing invoices is good practice because it creates a clear record of what was agreed, what was delivered, and what was paid.

What a tax invoice must include

A valid tax invoice must include your business name (or your name if you are a sole trader), your ABN, the date of the invoice, a description of the goods or services provided, the total amount payable, and an indication of whether the price includes GST or whether GST is applicable separately.

If you are not registered for GST, which is the case for most working holiday makers earning under $75,000 per year, you do not add GST to your invoices. Simply include your ABN and a note that no GST applies, or that the total is GST-free.

Why quoting your ABN on invoices matters

If you issue an invoice without an ABN, the business receiving it is required by law to withhold 47% of the payment before remitting the rest to you. This is called the no-ABN withholding rule. To avoid this, always quote your ABN on every invoice.

Keeping copies of your invoices

Keep a copy of every invoice you issue. These are the records you need to declare your contracting income accurately in your tax return. A simple spreadsheet or a folder of PDF invoices is sufficient. The ATO may ask to see them if your return is queried.

Need help?

Need an ABN to start issuing invoices?

We handle ABN registrations for working holiday makers and make sure everything is set up correctly. Get in touch and we will sort it.