For Australian sole traders

Sole trader invoicing, start to finish

Whether you have to issue one at all, what the ATO expects on it, what changes when you register for GST, and what you can claim back. Written for people who did not set out to become a bookkeeper.

Make an invoice now, freeStart with the rules

Do sole traders actually have to issue invoices?

Not for every single sale, no. There is no blanket law that says a sole trader must invoice. But there is one rule that catches most people: if a GST-registered customer asks you for a tax invoice for a sale of $82.50 or more including GST, you have to give them one within 28 days.

In practice the question is academic. An invoice is how you get paid, how you prove your income at tax time, and how your client claims the expense on their side. Cash jobs are no exception - the paperwork still has to exist even when the payment does not go through a bank.

So the useful question is not whether to invoice, but what has to be on it.

What has to be on a sole trader invoice

If you are registered for GST you are issuing a tax invoice, and the ATO expects seven things on it:

  1. 1The words "Tax Invoice"
  2. 2Your business name, as registered
  3. 3Your ABN, all 11 digits
  4. 4The date you issued it
  5. 5A description of what you supplied, itemised
  6. 6The GST amount, or a statement that the total includes GST
  7. 7The total amount payable

Cross the $1,000 mark and one more field appears: the buyer’s identity or their ABN. Below that you can leave the client’s details light, though including them is usually worth it anyway for your own records.

The full ATO checklist, with what happens when a field is missing

The GST fork: two different documents

This is where most sole trader invoices go wrong, and it is worth being precise about because the mistake runs in both directions. GST registration is compulsory once your turnover hits $75,000 in a 12-month period, and optional below it.

Registered for GST

  • Title the document "Tax Invoice"
  • Add 10% GST
  • Show the GST amount separately
  • Claim GST back on your own purchases
  • Lodge a BAS

Not registered

  • Title it "Invoice", never "Tax Invoice"
  • Do not charge GST
  • Do not show a GST line, not even $0.00
  • You cannot claim GST back either
  • No BAS to lodge

Charging GST when you are not registered is the more serious of the two errors: you are collecting tax you have no right to collect. Calling an invoice a tax invoice when you are not registered causes the same problem, because your client will try to claim GST that was never paid.

What your invoices must say under the $75,000 threshold

Templates, and why most people stop using them

A Word or Excel template works fine for your first few invoices. The trouble starts around invoice fifteen, when you are copying last month’s file, forgetting to change the invoice number, recalculating GST by hand, and trying to remember which ones have actually been paid.

If you want the file anyway, the templates are there. If you would rather skip straight to a finished PDF, the generator does the numbering and the GST for you and still costs nothing.

Free invoice generator

Fill it in, watch the invoice build itself, download the PDF. No account, no watermark. It handles the 10% GST and switches the title between “Invoice” and “Tax Invoice” depending on whether you are registered.

Open the generator

Or take the copy-and-paste templates, GST and non-GST

The other half: what you can claim

Invoicing is only the money coming in. As a sole trader your taxable income is what you earned minus what you legitimately spent running the business, so every unclaimed expense is tax you did not have to pay.

The ATO’s test is straightforward in principle: the expense must be directly related to earning your income, it must not be private, and you need evidence. It is the evidence that trips people up, because a year of receipts in the ute door is not evidence.

How to track expenses and keep the evidence the ATO wants

Questions sole traders ask

Do sole traders have to issue invoices?

There is no law that forces a sole trader to issue an invoice for every sale. But if a customer who is registered for GST asks you for a tax invoice for a sale of $82.50 or more including GST, you must give them one within 28 days. In practice you should invoice everything: it is how you get paid, how you prove income to the ATO, and how your client claims the expense.

Do I need an ABN to invoice as a sole trader?

You are not legally required to have an ABN, but without one on your invoice a business client must withhold 47% of the payment and send it to the ATO. That makes an ABN effectively mandatory for anyone invoicing other businesses. An ABN is free to apply for through the Australian Business Register.

Do I charge GST as a sole trader?

Only if you are registered for GST, which is compulsory once your turnover reaches $75,000 in a 12-month period and optional below it. If you are registered you add 10% and issue a document titled "Tax Invoice". If you are not registered you must not charge GST, must not show a GST amount, and must not call the document a tax invoice - it is simply an "Invoice".

What has to be on a sole trader invoice?

For a tax invoice the ATO expects: the words "Tax Invoice", your business name, your ABN, the date of issue, a description of what you supplied, the GST amount or a statement that the total includes GST, and the total payable. Invoices of $1,000 or more also need the buyer’s identity or ABN.

Can I invoice under my own name as a sole trader?

Yes. If you have not registered a business name, your own legal name is your business name and that is what goes on the invoice. If you have registered a business name you can trade under it, but your legal name and ABN still need to be identifiable.

How long do I have to keep sole trader invoices?

Five years from the date you lodge the relevant tax return. Digital copies are fine, as long as they are a true and clear reproduction and you can produce them if the ATO asks.

General information only, not tax advice. Check your own circumstances with the ATO or a registered tax agent.

Go deeper

How to invoice as a sole trader, step by step

The full walkthrough: ABN, GST decision, required fields, a worked example, payment terms and record keeping.

Sole trader invoice template (GST and non-GST)

Two copy-and-paste templates, one for each side of the GST line, plus the ATO basics behind them.

ATO tax invoice requirements: the 7 fields

The full checklist, the $82.50 and $1,000 thresholds, and what happens when a field is missing.

Invoicing when you are not registered for GST

What your invoices must say, and must not say, while you are under the $75,000 threshold.

Do you need an ABN to invoice?

The 47% withholding rule that makes an ABN effectively compulsory for freelancers and contractors.

Invoicing as a freelancer

Deposits, milestones, retainers and IP rights: the version for people billing project work.

Payment terms: 7, 14 or 30 days?

What each term actually does to your cash flow, and which one to put on the invoice.

How to prepare for BAS

Total the GST collected, subtract the GST paid, lodge on time. The workflow that keeps it under an hour.