If you subcontract to other businesses, your invoice is the document that gets you paid. It is also the document a head contractor’s bookkeeper will reject if something is missing. Getting it right the first time is the difference between being paid on the next run and waiting another month.
Here is what an invoice needs to contain in Australia, when GST applies, and the one mistake that can cost you nearly half the payment.
Do you need an ABN to subcontract?
In practice, yes. You are running a business, not being employed, so you need an Australian Business Number.
If you do not quote an ABN on your invoice, the business paying you is legally required to withhold 47% of the payment and send it to the ATO. That is not a penalty they choose to apply. If they fail to withhold, they can be liable for the amount themselves, which is why most head contractors will simply refuse to process the invoice.
There are narrow exceptions. Payments of $75 or less, excluding GST, do not trigger the withholding rule, and certain suppliers can complete a “Statement by a supplier” form instead of quoting an ABN. Neither exception is much use if you are subcontracting properly.
When do you have to register for GST?
You must register for GST once your annual turnover reaches $75,000. Turnover means your gross income before expenses, not your profit.
Once you cross that threshold you have 21 days to register. You can also register voluntarily below it, which some subcontractors do so they can claim GST credits on tools, materials and vehicle costs.
Two things worth knowing. The threshold is based on a rolling twelve months, not the financial year, so a strong few months can put you over sooner than you expect. And if you are not registered, you must not charge GST. Adding 10% to an invoice when you are not registered is a problem, not a rounding decision.
What has to be on a tax invoice
If you are registered for GST, your invoice needs to be a tax invoice. The ATO requires seven things:
- The words “Tax invoice”, stated clearly
- Your business name or identity
- Your ABN
- The date the invoice was issued
- A description of what you supplied, including quantity where relevant
- The GST amount, either shown separately or with a statement that the total includes GST
- Which items on the invoice are taxable, if not everything is
If you are not registered for GST, you still issue an invoice. It just cannot be called a tax invoice and it must not show a GST amount.
The extra rule for invoices over $1,000
Once a tax invoice totals more than $1,000 including GST, it must also identify the buyer. Their business name or their ABN is enough.
This is the requirement most often missed on subcontractor invoices, because it does not apply to smaller jobs and it is easy to keep using a template built for them. On a commercial job it will get the invoice sent back.
Practical things that get invoices paid faster
The compliance requirements are the floor. What actually shortens the wait is removing every reason for someone to put your invoice aside:
- Reference the job, not just the date. A purchase order number, site address or job reference lets the person approving it match your invoice without asking you.
- Invoice against what was agreed. If the job was quoted in stages, invoice in those stages. An invoice that does not match the agreed structure goes to the bottom of the pile.
- Attach the evidence. Sign-off, photos and any variations, kept with the job rather than scattered across text messages.
- Put your payment terms on it. An invoice without terms invites whatever terms the payer prefers.
- Send it the day the work is finished. Payment runs are calendar events. Missing one by a day can cost you two weeks.
Keeping the paperwork with the job
Most invoice disputes are not really about the invoice. They are about what was agreed weeks earlier, and whether anyone can still find it.
On Workforce Marketplace, the scope, the quotes, the messages and the sign-off stay attached to the job record, and payment runs through Stripe to your own connected account. When someone questions an amount three months later, the answer is on the job rather than in a phone that has since been replaced.
Creating an account, building a profile and applying for work are free.
This article is general information, not tax or legal advice. Thresholds and requirements change, and your circumstances may differ. Check the current rules at ato.gov.au or speak to your accountant before acting on anything here.
