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 like Invio's free invoice generator handles compliance, numbering, and GST calculations automatically.
Tip: Even if you start with a template, switch to software early. It saves hours at tax time when you need to report income to the IRD.
Add Your Business Details
Every invoice must include your identity as the supplier. This is a legal requirement under NZ tax law.
- Your trading name or legal name
- Business address
- Phone number and email
- IRD number
- GST number (if registered)
Add Client Details
Include the client's name and business name. For invoices over $1,000, the recipient's name and address are legally required. See the full NZ 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 15% GST. Show it clearly on the invoice. 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 illegal in NZ. If your annual turnover is under $60,000, GST registration is optional.
Set Payment Terms & Send
Clearly state when and how you expect payment. Common terms in NZ include:
- Due on receipt — payment expected immediately
- Due in 7 days — common for small jobs
- Due in 14–20 days — industry standard in NZ
Include your bank account number for direct deposit (the most common payment method in NZ).
GST Registered vs Non-GST Invoices
The biggest source of confusion for NZ sole traders. Here's exactly what changes depending on your GST status.
| Feature | GST Registered | Not GST Registered |
|---|---|---|
| Invoice title | "Tax Invoice" or "Taxable Supply Information" | "Invoice" only |
| GST number | Required | Not applicable |
| GST amount | Must be shown (15%) | Must NOT be charged |
| Price display | GST-inclusive or show GST separately | Total only (no GST breakdown) |
| Client can claim GST credit? | Yes | No |
| Turnover threshold | Over $60,000/year (mandatory) | Under $60,000/year |
Not sure which rules apply to you? Read the full Sole Trader Tax 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 illegal. Your client cannot claim it, and the IRD may penalise you.
No Invoice Number
Every invoice must have a unique, sequential number. Without it, your records are not IRD-compliant and disputes become harder to resolve.
Vague Descriptions
"Services rendered" is not enough. Describe what you did clearly — this protects you in disputes and satisfies IRD requirements.
No Payment Terms
Without clear payment terms, clients have no deadline. Always state when payment is due and your bank details for direct deposit.
Not Keeping Copies
The IRD requires you to keep records for 7 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?
Only if your annual turnover exceeds $60,000 — at which point GST registration is mandatory. Below that threshold, it's optional. If not registered, do not charge or show GST on your invoices.
What is the difference between an invoice and a tax invoice?
A regular invoice is simply a request for payment. A tax invoice (now called "Taxable Supply Information" since April 2023) is issued by a GST-registered supplier and must include specific details so the buyer can claim a GST credit. See the full tax invoice requirements.
Can I handwrite my invoices?
Legally, yes. Practically, no. Handwritten invoices are difficult to track, look unprofessional, and create problems at tax time. Free tools like Invio's invoice generator take less time than handwriting and keep records automatically.
How long should I keep copies of my invoices?
The IRD requires you to keep all business records — including invoices — for a minimum of 7 years. Digital invoicing software stores these automatically and makes them searchable.