How to Write a Tax Invoice in Australia

A complete guide to GST-compliant invoicing

An Australian tax invoice must show the words Tax Invoice, your ABN, business name, invoice date, a description of the items, the GST amount, and the total payable. GST runs at a flat 10% on taxable supplies, and a tax invoice is mandatory for taxable sales of $82.50 or more including GST; sales of $1,000 or more must also identify the buyer. Without a valid ABN, the payer must generally withhold 47% under PAYG.

Invoicing in Australia requires compliance with local GST regulations and specific formatting standards. Whether you are a freelancer, small business owner, or agency, this guide covers everything you need to create professional, legally compliant invoices in Australia using AUD ($).

Legal Requirements for Australia Invoices

✓Display your Australian Business Number (ABN) on all invoices. Without a valid ABN, the payer may be required to withhold 47% of the payment under the PAYG withholding rules.
✓Issue a tax invoice (rather than a regular invoice) for taxable sales of $82.50 or more (GST-inclusive). Tax invoices must meet specific ATO requirements to allow the buyer to claim GST credits.
✓Clearly identify GST-free supplies (such as basic food, medical services, and education) separately from taxable supplies on your invoices, as these are not subject to the 10% GST.
✓Support recipient-created tax invoices (RCTI) where agreed in writing with your customer. Under an RCTI arrangement, the buyer creates the tax invoice on the supplier's behalf.
✓Issue adjustment notes when the price or GST amount changes after the original tax invoice was issued. The adjustment note must reference the original invoice and explain the reason for the change.
✓Maintain all invoice records for a minimum of 5 years from the date of the transaction or the date of the last entry relating to the transaction, whichever is later, as required by the ATO.
✓Report all GST-liable sales and purchases accurately on your Business Activity Statement (BAS), which is lodged monthly, quarterly, or annually depending on your turnover.

Step-by-Step: Create an Invoice for Australia

Follow these steps to create a compliant Australia invoice with proper GST handling.

Estimated time: About 10 minutes

1
Set Up Your ABN and Business Details
Enter your 11-digit Australian Business Number, legal business name, trading name if applicable, and registered business address. Your ABN must be active and registered for GST if your annual turnover is $75,000 or more ($150,000 for non-profits).
2
Determine If a Tax Invoice Is Required
If the taxable sale is $82.50 or more (GST-inclusive), you must issue a tax invoice. For sales under $82.50, a regular invoice is sufficient. For sales of $1,000 or more, additional details like the buyer's ABN and identity are required on the tax invoice.
3
Enter Client Details
Add your client's business name, ABN (if applicable), and address. For tax invoices over $1,000, you must include the buyer's identity or ABN. Having the client's ABN on record also avoids PAYG withholding complications.
4
Add Line Items with GST Status
List each product or service with its description, quantity, and unit price. Mark each item as taxable (10% GST), GST-free (0% GST but still reported), or input-taxed (no GST credit available). This distinction is essential for correct BAS reporting.
5
Calculate GST Amounts
GST is calculated at a flat 10% on taxable supplies. Show the price excluding GST, the GST amount, and the total price including GST. Alternatively, you can show the total price as GST-inclusive with a statement that GST is included, and list the total GST separately.
6
Set Payment Terms in AUD
Specify your payment terms and due date. Common Australian terms are 14 or 30 days from invoice date. Include your BSB and account number for direct bank transfer, which is the most common payment method in Australia.
7
Generate a Professional PDF Invoice
Create a PDF that includes all ATO-required fields: the words 'Tax Invoice' (for taxable sales over $82.50), your ABN, business name, invoice date, description of items, GST amounts, and total payable. Ensure the layout is clear and professional.
8
Report on Your BAS
Record the invoice in your accounting system for inclusion in your next Business Activity Statement. Report total sales, GST collected, and GST paid on purchases. Lodge your BAS by the due date to avoid penalties and interest charges from the ATO.

Tips for Invoicing in Australia

Remember the $82.50 threshold: this is the GST-inclusive amount at which a tax invoice becomes mandatory. Below this amount, you can issue a simpler invoice, but the buyer cannot claim a GST credit without a tax invoice.
Understand the difference between GST-free and input-taxed supplies. GST-free supplies (like basic food and exports) allow you to claim GST credits on related purchases, while input-taxed supplies (like residential rent and financial supplies) do not.
If you have employees, ensure your Single Touch Payroll (STP) reporting is up to date. While STP is separate from invoicing, the ATO cross-references business records, and discrepancies can trigger audits.
Keep all business records, including invoices, receipts, bank statements, and BAS lodgements, for at least 5 years. The ATO can request records for review at any time within this period, and failure to produce them can result in penalties.
Lodge your BAS on time to avoid the Failure to Lodge (FTL) penalty, which starts at $313 per 28-day period overdue and can accumulate up to a maximum of $1,565. Pay the amount owing by the due date to also avoid the General Interest Charge (GIC).

Australia Invoicing FAQ

When do I need to register for GST?

You must register for GST if your business has an annual turnover of $75,000 or more ($150,000 for non-profit organisations), or if you provide taxi or ride-sharing services regardless of turnover. You can voluntarily register below these thresholds if you want to claim GST credits on business purchases. Registration is done through the Australian Business Register (ABR).

What is the difference between a tax invoice and a regular invoice?

A tax invoice is required for taxable sales of $82.50 or more (GST-inclusive) and must include specific details such as the words 'Tax Invoice,' your ABN, the GST amount, and the total price. A regular invoice does not include these GST-specific details. Only tax invoices allow the recipient to claim GST credits on their BAS.

Do I need to include GST on all my invoices?

You only charge GST if you are registered for GST and the supply is taxable. GST-free supplies (such as most basic food, certain medical and educational services, and exports) are not subject to GST even if you are registered. If you are not registered for GST, you must not charge GST, and you should not include the words 'Tax Invoice' on your invoices.

How long must I keep invoice records?

The ATO requires you to keep all business records, including invoices, for a minimum of 5 years from the date you prepared or obtained the record, or from the date of the last transaction the record relates to, whichever is later. Records can be kept electronically as long as they are readable and have not been altered. Failure to maintain proper records can lead to penalties.

What happens if I do not include my ABN on an invoice?

If you do not include your ABN on an invoice, the payer is generally required to withhold 47% of the payment amount (the top marginal tax rate plus Medicare levy) and send it to the ATO under the Pay As You Go (PAYG) withholding rules. This is known as the 'no ABN withholding' rule. To avoid this, always display a valid, active ABN on every invoice.