This article is about the Australian tax invoice templates. You can make your own tax invoice after reading through this document. Also, we are providing you with more than 20 tax invoice templates for free. Quickly download and personalize for your business needs.
Even though we provide you with the ready-made template, as per our regular practice we would love to provide you with knowledge. Yes, we don’t believe in blindfolding you just with templates and hence providing you with detailed insight about the tax invoice in Australia.
What is the difference between invoice and tax invoice?
Invoice is a document that usually a seller or a service provider’s issues to the buyer or the service taker with details of the materials used, labor charge, etc. Also, invoices that are not registered for GST is called an usual invoice.
On the other hand, the registered dealer provides the buyer with an invoice about the tax payable amount is called the tax invoice. This is specific to the tax payment. It includes details about the goods service tax (GST) information. The tax invoice must be given for all purchases that are taxable. If any customer asks for it, then you must provide it within 28 days of the request. Also, for every purchase, more than 82.50 Australian dollars including GST must be provided with a tax invoice for collection.
Checkout Our Contractor Invoice Templates for Australia
What is a tax invoice in Australia
The tax invoice in Australia is nothing but a document created for a business in Australia containing the ABN number. Let us talk in detail about ABN later in this article. Australian tax invoice document will also contain the tax registration number of the service provider or the seller as well as the GST detail allowing the buyer to claim for GST credit.
Need for a tax invoice
A tax invoice is a document required for records purposes. However, it does not stop there and it has the following benefits listed below.
- It allows the buyer to claim for GST credit
- The seller can have this document for payment reminders
- It confirms the professionalism of the business and hence more business is generated.
- As this document helps the business to comply with the country tax norms it can enjoy time to time benefits announced as per tax law.
What does an Australian tax invoice need to include
In this section let us briefly understand the elements to be present in the tax invoice generated in Australia. It is not country specific though but few terms are related to the country.
Certainly, you must be aware that your invoice should contain the payment details enabling the customer to make your payment. But, it does not stop with those details and there is much more. Let us explain each section in detail for enlightening you with information.
This contains two parts namely the seller/service provider and the buyer/recipient. Contact details include the
- Name of the business
- Business address
- Website and email address
- Contact numbers with Fax number
- Name, email and contact address and phone number of the recipient
Then comes date which will include the date of the invoice and the date when the product was sold or the service provided. This may be the same or different depending on when you prepare the invoice.
This is a unique number generated for reference purposes. It can have the month and the number in any sequence you follow for easily tracking the invoice.
ABN/ ACN Number
This is mandatory when you prepare a tax invoice for business in Australia. Australian Business number is an 11 digit number provided as identification to each business. It is issued by the government and it must be quoted in all tax invoices you submit to the customers. This is different from the tax file number (TFN). Further, it is important for you to register for GST with this ABN.
Goods and Services details
This section must contain the details about the goods purchased, its description, the purpose, etc. Alternatively, if it is a service offered, then explain the service details and the materials purchased if any for the same reason.
Now, comes the money related details. Under the payment, the information section provides the cost for goods and labor. Apart from this, in this section you must also provide details about the payment terms, options, and account details.
- Payment terms – Enter the date you will wait for the payment to be made by the customer. It could be a specific date or term like 15 days from date of issue of invoice etc
- Mode of Payment – You can give some options for payment like bank transfer, cheque deposit, cash payment, card payment, Paypal transfer, etc.
- Account details – Once you confirm the mode of, then you must provide the account details like bank details or Paypal ID for letting the customer make payment.
Signature and Seal
Finally, space for signature and business seal is provided to make it look authenticate.
How to send invoices
Now, your invoice is ready but there is a process to be followed to send your invoice too. Let us explain that in brief as we are aware that most of you will know the same.
- First things first, prepare the invoice from the scratch by including the details given above, or simply download our free template and fill in all the details.
- Then save the document and print it on an A4 sheet. Sign the document.
- File it for your reference
- Scan the signed document to send the softcopy via email or send the print out via fax or post. It is also fine if you handover the document to the concerned person in person.
How to deal with incorrect invoices
In case you have prepared an incorrect invoice, then you need to correct it else it stands invalid. Especially tax invoice must be correctly prepared as it is a government document and the recipient might use it for claiming the GST waiver. Hence submitting your copy to the government offices must be doubly checked to avoid any mistakes.
Things usually go wrong in the invoice are the date, amount, and descriptions. Please check before you proceed to avoid payment delays. Provide a detailed breakup for work description enabling the customer to interpret the details appropriately.
Technology is skyrocketing in the last decade and hence paper invoice is not mandatory. You can even move forward with a digital invoice. You don’t need to be a techie to make a digital invoice. It is simpler than the usual one. Yes, I am going to talk about any software tool here?
The Australian government has approved e-invoice in 2018 and they look at 500m dollar annual savings due to this. Try Xero for 30 days and then you can purchase. Anyways, we are not promoting any business here. This is just a knowledge sharing piece.
But, I would suggest you start with e-invoicing just by sending a PDF tax invoice to your client. This is the first step to go digital. Use our PDF template and customize it to share with your clients. Doing away with paperwork is called the electronic process and sending out emails as a first initiative to move towards the digital world.
Top 3 Benefits of E-invoicing to improve your business 30X
- You can keep track of all work in one click. No need to check for files every time.
- Save time and space by saving all invoices in your folder in the PC and not in the cupboards anymore.
- Quickly keep online reminders to follow up payment
Invoice for taxable and nontaxable items
Your invoice must clearly differentiate taxable and nontaxable sales to let know the buyers about the same. This is will help them to categorize them as GST free or input taxed items. The tax invoice must also contain the taxable sale details, GST amount details and the total amount. This break up will make the buyer get some credit from the government in the GST.
GST in invoice
Let us now look at the term GST in detail. How and where to place the GST in the invoice. GST amount payable must be displayed for every item by creating an individual column. It can include the price or exclude. However, the same to be expressed clearly to avoid any confusion. Mention as GST including if GST is included in the total, else provide GST and then incorporate before finding the total amount.
Few tips about rounding of GST in the invoice
In the event of the GST including any fraction of cents, then there is a rounding of rule to apply. Follow these simple tips to round off the GST.
- When only one taxable sale is present on the tax invoice, then the GST amount must be rounded to the nearest cent.
- If the taxable sale is
more than one, then apply two rules and follow this total invoice rule.
- Each unrounded GST amount with respect to every taxable sale must be added and rounded off to the nearest cent.
- Finally, if the taxable sale contains a GST amount equal to 1/11 of the price, then add the GST exclusive value upon each taxable sale and find the GST to finally round it to the nearest cent.
(Note: for every 0.5 cents and upward)
Recipient-created tax invoices
There is a scenario when the tax invoice is created not by you but by the buyer too. Yes, in general, the seller or the service provider creates the invoice and that is what we have been discussing so far. But there is situation when the receiver creates an invoice themselves. Then you must insist on your process or at least check the details. There is one more suggestion we provide is, agree upon terms with the recipient mutually and download the recipient created tax invoice and fill that to align with your buyers want.
However, you must abide by the following rules to use a recipient-created tax invoice
- Both of you must have a valid GST number
- You must discuss and sign an agreement before filling details in the tax invoice.
- Check the goods or the services sold falls under the type mentioned in this agreement.
Invoicing customer outside of Australia
There is a catch and we will discuss that in this last section. Yes, it is all about how to invoice a customer who lives outside Australia. We understand that your business is registered in Australia and you can have a client outside Australia. Now, how will you invoice is the question in your mind. Stay assured, we will provide you with all the details about the same in this section.
The basics remain the same in the invoice and minor tweaking is all needed to make it perfect for your business.
Checklists for tax invoice send to the customer outside Australia
- Name, address, phone, and email id of both the sender and the receiver
- ABN number of your firm is a must as the customer might not have one due to their absence in the country
- Tax invoice name must be included in the title
- Invoice number and date
- Issue and the due date for payment
- Goods description
- Payment details with total including GST
- Mode of payment and payment terms
If you want to invoice in a different language or currency, then you need to follow these steps
- Make sure to print your invoice in English only. Business in Australia allows only English as the communication language
- But, you can send the invoice in foreign currency to allow customers for easy payment. Follow the exchange rate on the date you agreed for the work and make calculations. But conversion losses are at your own risk
GST in Australia
- You can issue a tax invoice only to clients who are registered for GST.
- Exports are GST-free so you can still proceed with business outside Australia
- Every non-taxable sale should be issued with a regular invoice and not a tax invoice.
Yes, you are ready to prepare your tax invoice. But, before winding up let us summarize a few steps and tips for your benefit for timely collection of payment from your client.
- Ensure to send an invoice on time to collect payment on time
- Insist on the payment due date in your invoice to let the client know about the same and don’t leave it open-ended. Also, include a penalty clause for the failure of clearing payment. This will remind customers to pay you for your sales or service
- Do not stick on to one payment option but keep it open so that even if one mode fails, the other one can help you receive payment. For example, not all might have a PayPal ID, hence provide a bank payment option or some other mode alternatively.
- Send an e-copy of your invoice to confirm receipt as sometimes postal letters get lost due to various reasons. Also, it is easy to track and follow-up
- Make a clear invoice and explain all points in detail to avoid any discrepancy
- Having a good relationship with your customer will reap benefits above all these tips you followed to get paid on time
You can write an invoice in Australia as a regular one without a GST number mentioning the sales or service details, price, and payment terms. In case it is a tax invoice, then mention the same and provide the GST number.
An invoice that is issued for taxable sale or service is called a tax invoice. It is different from the usual invoice as it must contain a registered GST number of the supplier.
There are two ways to prepare a tax invoice. The first option is to follow the details given under the heading What does an Australian tax invoice need to include? and make a word document save it and edit to add the actual details.
The second is to quickly download a free template from this site and edit to feed details and send it to the client.
Both are simple and the former one you need to invest time to fill the details and format it at the same time latter one will save your time.
A tax invoice can be issued by a GST registered business owner to the buyer or the client. It must be provided for taxable sale or if the client requests for the same. When the client requests, then the supplier should make sure to give it within 28 days from the requested date.
Yes, sales above 82.5 $ and below 1000 $ must contain the ABN number of the supplier. Sales above 1000 $ must include both supplier and purchaser ABN number. ABN stands for Australian Business Number or ACN – Australian Company Number.
Yes, tax invoice must mention TAX INVOICE in it.
Sales less than 1000 Australian dollars must contain the sellers’ ID proof, ABN or ACN (Australians business/company number), invoice date, price, quantity and detail of the items sold. GST amount and the taxable amount details.
If the value is beyond 1000 Australian dollars, then the ABN or ACN of the buyer must also be included.
Yes, but it will not allow the recipient to claim for any GST benefits. The purpose of the tax invoice is for the GST waiver and that gets defeated if an unregistered person issues a tax invoice.
- Sole trader invoice template Australia
There is no much difference in a sole trader tax invoice in Australia. The sole trader invoice template contains the same details as in a business tax invoice in Australia. Taxable income sale of 82.5 $ and above including GST, then tax invoice must be prepared.
Australian sole trader invoice template can be used by the following businesses
- Electricians, Carpenters, plumbers, builders – House or office service providers who solely owns their business
- Web developers, web designers, graphic or interior designers who have registered their business as a sole proprietor
- Every freelance business person also can use this template.
Thus, we are coming to a conclusion about the Australian tax invoice template. Yes, we provided you with details and free templates too. Wishing you good luck to begin printing these templates and personalize for your business needs. Collect payment on time using these tax invoice templates.
However, we are closing our article and allowing you to open your business and use these inputs and templates. Feel free to share your feedback and suggestions for us to improve our services. Let us know about any templates we missed in this context which we can incorporate as well.