If you are registered for GST, the document you send a client is not just an invoice — it is a tax invoice, and it has to carry specific information before a GST-registered client can claim the GST back. Get one of those elements wrong and your client's bookkeeper sends it back. Here is exactly what belongs on it.
The seven required elements
For a sale of less than $1,000, a tax invoice must show:
- That the document is intended to be a tax invoice — the words "Tax invoice"
- Your identity as the seller — your business or trading name
- Your ABN
- The date the invoice was issued
- A brief description of what was sold, including quantity and price
- The GST amount, or a statement that the total price includes GST
- The extent to which each sale on the invoice includes GST
For sales of $1,000 or more, you must also show the buyer's identity or their ABN. That single extra field is the most common reason a larger invoice gets rejected.
Working out the GST line
GST is 10%, and the direction matters:
- Quoting excluding GST — multiply by 1.1 for the total. $2,000 becomes $2,200, of which $200 is GST.
- Quoting a GST-inclusive price — divide the total by 11 to find the GST. The GST in $2,200 is $200.
The error to avoid is taking 10% off an inclusive total: 10% of $2,200 is $220, which is not the GST in it. The GST calculator shows all three figures at once so this cannot go wrong.
Mixed invoices
If some lines are taxable and others are GST-free, you must show which is which — that is element seven. A line-by-line GST column handles it. If every line is taxable, the shorter statement "Total price includes GST" is enough on its own.
If you are not registered for GST
Do not write "Tax invoice" and do not show a GST line. You must not charge GST unless you are registered, and an invoice implying you did is a genuine problem — your client may claim a credit they are not entitled to. Head the document "Invoice" instead. Including your ABN is still worth it: without one, a business client may be required to withhold 47% of the payment under the no-ABN withholding rules.
Fixing a mistake after you have sent it
Once a tax invoice has gone out, the clean fix is an adjustment note rather than a quiet edit to the original. An adjustment note references the original invoice and records the difference, so both parties' GST records still agree. Re-issuing a changed invoice with the same number leaves your client's books disagreeing with yours.
A worked example
| Description | Amount | GST |
|---|---|---|
| Site prep — 12 hrs @ $90 | $1,080.00 | $108.00 |
| Materials | $320.00 | $32.00 |
| Council permit (GST-free) | $0.00 | GST-free |
| Total including GST | $1,540.00 | $140.00 |
Note the third line: it is GST-free, and showing that explicitly is what satisfies the requirement to state the extent to which each sale includes GST.
Not doing this by hand
Every element above is mechanical, which is exactly the kind of thing software should handle. Balaana's free invoicing fills in the wording, your ABN and the per-line GST, adds the buyer's details automatically once an invoice passes $1,000, and files the GST into the right quarter for your BAS.
Related reading
- How to get paid on time
- What is a BAS?
- GST calculator
- What is an invoice?
- What is a credit note?
- Recipient created tax invoices
- What is a proforma invoice?
Frequently asked questions
Yes if you are registered for GST — it is one of the seven required elements. Even if you are not registered it is strongly advisable, because a business client who receives an invoice without an ABN may be required to withhold 47% of the payment and remit it to the ATO.
Check it against the seven elements. The two that most often trip people up are the buyer’s identity or ABN on invoices of $1,000 or more, and stating the extent to which each line includes GST on a mixed invoice.
No. You must not charge GST or issue a document described as a tax invoice unless you are registered. Head it "Invoice" instead, with no GST line. Doing otherwise could lead your client to claim a credit they are not entitled to.
Five years from the date you lodge the return they relate to. Keeping them digitally is fine — the ATO accepts electronic records provided they are a true reproduction and remain accessible for the whole period.
An invoice number is not one of the seven required elements, but a consistent unique reference on every invoice is standard practice and makes reconciliation and adjustment notes far easier to manage.
Sources
Tax invoice requirements are set by the Australian Taxation Office. Confirm the current requirements at ato.gov.au. General information only — not personal tax advice.