How to create a tax invoice in Australia, step by step

A tax invoice is built in seven steps: head it “Tax invoice”, identify yourself and your ABN, date it, describe what you sold, show the GST, add the buyer’s details once the sale reaches $1,000, then number it, set the terms and send it. Ten minutes the first time, two minutes every time after, and none of the steps are hard once you’ve seen the order.

This is the how-to. The reference list of what a compliant document contains is in what must legally be on an Australian tax invoice

• read that one when you need to check a field, this one when you’re building the document.

General information, not tax advice. The ATO is the authority - see ato.gov.au or ask a registered tax or BAS agent.

Before you start

Tax invoices are for sellers registered for GST. If you aren’t registered, stop here: the document you’re making is a plain invoice with no GST on it, and heading it “Tax invoice” causes a problem for your customer rather than solving one for you. See how to invoice without GST for that version.

Have three things to hand before you open the template: your ABN, the price you agreed, and whether that price was GST-inclusive or GST-exclusive. That third one is where most of the errors come from, so settle it before you type a number.

Steps 1 to 3: heading, identity, date

Step 1. Head it “Tax invoice”. The ATO’s tax invoices page lists this first among the 7 details a tax invoice for a taxable sale under $1,000 has to include enough information to clearly determine: that the document is intended to be a tax invoice. Putting those words prominently at the top is the plainest way to satisfy it, and a document headed only “Invoice” leaves the point open to argument.

Step 2. Your identity and your ABN. Your name or registered trading name, and your ABN, in the header block. As a sole trader you’re not a separate legal entity, so your own legal name is fine if you don’t trade under a registered name. The ABN is a required field on a tax invoice, and separately it’s the field that stops a business payer from having to withhold tax from what they send you.

Step 3. The date of issue. The date you’re issuing the document, which is also the date payment terms are counted from. If the work was done at a noticeably different time, show that too, as a line in the description rather than as the invoice date.

Step 4: describing what you sold, and working out the GST

The description has to be enough to identify what was sold, with the quantity where that’s relevant, and the price. Write it for the person approving payment, who often wasn’t the person who hired you.

Then the GST. It’s 10% on most goods and services sold or consumed in Australia, per the ATO’s how GST works page, and there are two directions to calculate it in.

From a GST-exclusive price. Multiply by 10% to get the GST, and by 1.1 to get the total. A $2,000 job carries $200 of GST and totals $2,200.

From a GST-inclusive price. Divide the total by 11 to get the GST inside it. That same $2,200 total contains $200 of GST. The divide-by-11 direction is the one people get wrong, usually by taking 10% off the total instead, which gives $220 and is wrong by $20.

The ATO allows two ways to show it. Either show the GST amount separately, or - where the GST is exactly one-eleventh of the total price - use a statement reading “Total price includes GST”. The second option is only available when everything on the invoice is taxable at 10%. Mix in items that aren’t taxable, and the shortcut breaks: the same page’s guidance on taxable and non-taxable sales is that the invoice then has to clearly show which items are taxable, the GST to be paid, and the total. The ATO’s GST-free sales page lists what falls outside GST.

Step 5: the extra field from $1,000

Tax invoices for sales of $1,000 or more also need the buyer’s identity or ABN. That’s the entire difference between the two formats, and it’s an easy one to miss, because most people build one template around small jobs and never revisit it.

The ATO notes that a tax invoice meeting the $1,000-and-over requirements can also be used for smaller sales. That’s the practical answer: put the customer’s name and ABN on every invoice and stop thinking about the threshold at all.

Steps 6 and 7: number it, set terms, send it

Step 6. A unique invoice number and explicit terms. Sequential, never reused. Then a specific due date - “Due 6 October 2026”, not “payable on receipt” - plus bank details exactly as your bank holds the account name, and the reference you want used on the transfer. If the customer issued a purchase order number, put it on the invoice; some organisations genuinely cannot pay without it.

Step 7. Send it and keep the copy. Email the PDF to whoever processes invoices, the same day the work is finished. There’s a timing rule to know: if a customer asks for a tax invoice, the ATO requires you to provide one within 28 days of the request, unless the sale is $82.50 including GST or less. Then keep your copy. Most business records have to be kept for 5 years under the ATO’s record keeping rules, generally from when the record was prepared or obtained, or the transaction completed, whichever is later.

One thing not to do at this stage: if something turns out to be wrong after the invoice has gone out, don’t quietly edit the original and reissue it under the same number. Where the document simply got a detail wrong, a corrected tax invoice that makes clear it replaces the original is the usual fix. Where the sale itself changed after the fact - the price altered, part of it was cancelled, a credit was given - a different document, an adjustment note, is what the GST rules call for, and that is worth checking with a registered tax or BAS agent. Either way both sides end up with a trail of what changed.

Common mistakes

Rounding each line instead of the invoice. Where a GST amount includes a fraction of a cent, the ATO sets out specific rounding rules on its tax invoices page.

“Invoice” where “Tax invoice” was needed. Cosmetic to look at, substantive in effect.

A missing ABN. It’s a required field, and its absence also puts the payer in the position of having to withhold from your payment.

Forgetting the buyer from $1,000. See step 5. The fix is to include buyer details always.

Charging GST while not registered, or leaving GST off while registered. Both are corrections that have to be unwound through the other party’s books, not just yours.

How Apsis helps

Apsis builds the document in the right order so the required fields can’t be left out: it fills your trading name and ABN from your business details, applies the issue date, numbers the invoice sequentially, and calculates GST from the line items rather than leaving you to divide by 11 in your head. Client details carry through from the client record, so the buyer identity that a $1,000-plus sale needs is already there. Quotes and invoices are on the free plan, which covers 5 clients and 20 invoices a month, and share the same records, so an approved quote becomes an invoice without retyping. If you want a GST and BAS view over the same numbers when the quarter closes, that’s the tax module on the paid plan.