Quick answer
Most invoices to overseas clients are GST-free exports — you don’t charge the 10% GST. But the export still counts toward your $75,000 GST registration threshold, and you have to keep the AUD-converted record for the ATO. Bill in AUD if you want zero FX risk, or in their currency if you want them to pay easily. Use Wise, Airwallex or Revolut Business to receive payment — SWIFT transfers can cost 3–6% in hidden FX margin.
Step 1 — Is the sale actually GST-free?
Under the GST Act, exports of goods and services from Australia are generally GST-free (zero-rated). The two main categories:
Exported goods
GST-free if you physically export them within 60 days of the earlier of: receiving payment, or issuing the invoice. Keep your shipping records (AWB, B/L, customs export declaration) for 5 years.
Services to non-residents
GST-free if the recipient is outside Australia and not in Australia at the time of supply, and the supply isn’t directly connected to Australian real property or goods physically located in Australia.
Translation for freelancers and consultants: if your client is overseas (their business is registered overseas, not in Australia) and the work isn’t about Australian property or Australian-located goods — it’s GST-free.
Examples
- Web design for a UK e-commerce brand — GST-free
- SEO consulting for a US SaaS — GST-free
- Marketing strategy for a Singapore company’s expansion into Australia where the work directly relates to Australian property — not automatic, get advice
- Tour guide service in Australia booked by overseas client — GST applies (service supplied in Australia)
Step 2 — Mark the invoice correctly
For GST-free exports, include on each line: “GST-free export”. Your total line shows $0 GST. You still issue an invoice with all your normal ATO-compliant fields (ABN, business name, date, description, totals), and the words “Tax invoice” aren’t legally required if there’s no GST — but it doesn’t hurt to leave them on.
More detail on this in how to invoice GST-free items.
Step 3 — Pick a currency
Option A: Bill in AUD
Pros: no FX risk for you — the agreed amount is what hits your bank. Bookkeeping is trivial; the AUD figure is the AUD figure.
Cons: some overseas clients (especially smaller ones) struggle to pay AUD. Their bank may charge their FX margin and the client absorbs it — which they will then haggle over.
Option B: Bill in client’s currency (USD, EUR, GBP, etc.)
Pros: easier for the client; faster payment.
Cons: you eat the FX move between invoice date and payment date. For 30-day terms on USD this can be ±2–3% on the headline amount.
For one-off small invoices, billing in their currency usually wins (easier = faster). For recurring or large invoices, AUD shifts the risk to them and removes accounting friction.
Step 4 — How to actually receive the money
Wise Business (recommended for under $20k)
Multi-currency account with local receiving details in USD, EUR, GBP, NZD, etc. The client pays domestically in their currency; you convert to AUD at mid-market rate + small fee (typically 0.4–0.6%). Beats SWIFT by miles.
Airwallex (good for $5k+ regular)
Similar multi-currency model; competitive FX; useful if you want to hold balances in multiple currencies.
Stripe / PayPal
~2.9% + a fixed fee per transaction. Easy if your client just wants to click a card link, but expensive at scale.
SWIFT bank transfer (avoid where possible)
Big banks typically pad FX by 2–4% plus an inbound fee ($15–$30). On a $5,000 USD invoice that’s $100–$200 you don’t see. Only use if the client absolutely insists.
Step 5 — ATO record-keeping for foreign currency
The ATO needs your records in AUD. The rule:
- If invoiced in foreign currency, convert to AUD using a reasonable exchange rate at either the invoice date or the payment-receipt date (be consistent)
- The RBA daily rate, the ATO’s published monthly average, or your bank’s actual conversion rate are all reasonable
- Keep both the original-currency invoice and the AUD conversion record for 5 years
On your tax return, foreign-sourced business income gets reported as ordinary AUD income alongside your Australian sales.
The $75,000 GST threshold trap
A common misconception: “Exports are GST-free, so they don’t count toward $75k.” Wrong — the threshold is based on turnover, which includes GST-free supplies. If you do $80k of exports and zero domestic sales, you still must register for GST.
Once registered, you charge GST on Australian sales (and can claim input tax credits on Australian expenses), and your exports remain GST-free — but you have to file BAS quarterly.
Withholding tax: do you have to worry about it?
When you sell goods/services to an overseas client, they sometimes have local withholding tax rules (e.g. some US clients withhold 30% from foreign service providers unless you complete a W-8BEN/W-8BEN-E declaring tax residency). Australia has double-tax treaties with most major economies that typically reduce or eliminate this — but you have to file the form before they pay. If you’re billing US clients, get a W-8BEN-E sorted up-front.
Sample invoice wording
Tax Invoice Jane Doe Design ABN: 12 345 678 901 Date: 2026-06-04 Invoice #INV-2026-118 Bill to: Acme SaaS Ltd 1 Market St, San Francisco CA 94105, USA Description Qty Rate (USD) Amount (USD) --------------------------------------------------------------------------- Brand strategy + visual identity package 1 5,000 5,000 GST-free export of services (s.38-190(1) Item 2 GST Act) Total (USD) 5,000.00 GST 0.00 Total due USD 5,000.00 Payment: Wise Business (USD receiving details on file). Terms: Net 14.
Frequently asked questions
Do I charge GST when I invoice an overseas client?
Most exports of goods and services to overseas clients are GST-free in Australia, so you don’t charge GST. Goods must be physically exported within 60 days; services must be supplied to a recipient outside Australia who’s not in Australia at the time of supply. Mark the line “GST-free export” on the invoice.
Should I invoice an overseas client in AUD or USD?
Invoicing in AUD removes currency risk for you — the client absorbs the FX cost. Invoicing in their currency makes payment easier for them and you absorb the FX. For ATO record-keeping you must convert to AUD at the payment date (or invoice date) using a reasonable exchange rate — the RBA daily rate or your bank’s rate is standard.
Do GST-free exports count toward the $75,000 GST threshold?
Yes. The $75,000 GST registration threshold counts all turnover — including GST-free export sales. So even if you only sell internationally, you can still be required to register for GST once turnover hits $75k.
What’s the cheapest way to get paid by an overseas client?
Wise Business, Airwallex and Revolut Business typically beat traditional bank SWIFT transfers (which can lose 3–6% to FX margin + fees). Stripe and PayPal are easy but charge ~2.9% + a fixed fee. For invoices over $1,000, multi-currency accounts almost always win.
How do I report foreign income on my Australian tax return?
Foreign-sourced business income from your sole trader or company is reported in AUD on your Australian tax return as ordinary income. Convert at a reasonable rate (usually the payment-date rate). Keep the original-currency invoice + the conversion record together for 5 years.