InvioCreating Your First Sole Trader Invoice
Choose Your Invoice Format
You have three options: invoicing software (recommended), a spreadsheet template, or a paper-based system. Dedicated invoicing software handles saved clients, numbering, GST calculations, and payment follow-up more cleanly than a one-off template.
Tip: Even if you start with a template, switch to software early. It saves hours at tax time when you need to lodge your BAS or report income to the ATO.
Add Your Business Details
Every invoice must include your identity as the supplier. This is a legal requirement under Australian tax law.
- Your trading name or legal name
- Business address
- Phone number and email
- Your ABN (Australian Business Number) - it avoids a client withholding tax, and is mandatory once you're GST-registered
Add Client Details
Include the client's name and business name. For invoices of A$1,000 or more, the recipient's identity or ABN is legally required. See the full Australian tax invoice requirements for details.
Describe the Work or Products
List each service or product as a separate line item. Include:
- Clear description of the goods or services
- Quantity and unit rate
- Line total for each item
- Date the work was completed
Calculate GST (If Registered)
If you're GST registered, you must add 10% GST. Show it clearly on the invoice, either separately or as "Total price includes GST". If you're not GST registered, do not charge GST - and make sure your invoice does not say "Tax Invoice".
Important: Charging GST when you're not registered is against the law. If your GST turnover is under A$75,000 a year, registration is optional.
Set Payment Terms & Send
Clearly state when and how you expect payment. Common terms used in Australia include:
- Due on receipt - payment expected immediately
- Due in 7 days - common for small jobs
- Due in 14-20 days - a common term for larger jobs
Include your BSB and account number for direct deposit (the most common payment method in Australia).
GST Registered vs Non-GST Invoices
The biggest source of confusion for Australian sole traders. Here's exactly what changes depending on your GST status.
| Feature | GST Registered | Not GST Registered |
|---|---|---|
| Invoice title | "Tax Invoice" | "Invoice" only |
| ABN | Required (mandatory field) | Recommended - avoids the payer withholding 47% |
| GST amount | Must be shown (10%) | Must NOT be charged |
| Price display | GST-inclusive or show GST separately | Total only (no GST breakdown) |
| Client can claim GST credit? | Yes | No |
| GST turnover threshold | Over A$75,000/year (mandatory) | Under A$75,000/year |
Not sure which rules apply to you? Read the full Tax Invoice Requirements AU guide for more on GST registration thresholds.
5 Common Invoicing Mistakes to Avoid
Charging GST When Not Registered
If you're not GST registered, adding GST to your invoice is against the law. Your client cannot claim it, and the ATO may penalise you.
No Invoice Number
The ATO doesn't list a sequential invoice number among its mandatory tax invoice details, but a unique reference makes it far easier to track payments, reconcile your BAS, and resolve disputes. Most invoicing software (including Invio) numbers them automatically.
Vague Descriptions
"Services rendered" is not enough. Describe what you did clearly - this protects you in disputes and satisfies the ATO's description requirement.
No Payment Terms
Without clear payment terms, clients have no deadline. Always state when payment is due and your BSB and account number for direct deposit.
Not Keeping Copies
The ATO requires you to keep records for at least 5 years. If you're emailing invoices as PDFs, ensure you have backups. Using invoicing software solves this automatically.
Invoice vs Quote: When to Use Each
Invoice
Sent after the work is done. It's a request for payment - a legal document.
- Legally binding
- Includes payment terms
- Required for tax records
Quote
Sent before the work begins. It's an estimate - not a demand for payment.
- Non-binding estimate
- Helps win the job
- Can be converted to invoice
Frequently Asked Questions
Do I need to charge GST on my invoices as a sole trader?
What is the difference between an invoice and a tax invoice?
Can I handwrite my invoices?
How long should I keep copies of my invoices?
Do I need an ABN to invoice as a sole trader in Australia?
Your ABN is not the same as your TFN (Tax File Number) - a TFN is your personal or entity income-tax identifier and should never appear on a customer-facing invoice. Your ABN is the public business identifier that belongs on invoices, quotes, and business correspondence. See our ABN invoicing guide for the full format and withholding rules, or check ato.gov.au for guidance specific to your situation.