What needs to be on a tax invoice, and what to check when a contractor bills you

What makes a tax invoice valid — sales under $1,000

• The words 'Tax invoice' stated somewhere on the document.
• The seller's identity (their business name).
• The seller's ABN.
• The date the invoice was issued.
• A brief description of what was sold, including the quantity and price.
• The GST amount payable, if any — either shown as a separate amount, or a statement that the total price includes GST.
• If the sale includes a mix of taxable and GST-free items (fresh food alongside equipment, for example), which items the GST applies to.

Sales of $1,000 or more

Everything above, plus the buyer's identity or ABN — your business name or ABN needs to be on the invoice too.

A few invoice details people get wrong

• A quote, pro forma invoice or statement isn't a tax invoice, even if it has all the same figures on it — it needs to say 'Tax invoice' and be the actual bill.
• You need to hold a valid tax invoice to claim a GST credit on any purchase over $82.50 (including GST). Under that, a cash register receipt is enough.
• If a supplier isn't registered for GST, their invoice shouldn't show GST at all, and it shouldn't say 'Tax invoice' — just 'Invoice'. Keep the receipt either way.
• Recipient-created tax invoices (where you, the buyer, issue the invoice instead of the seller) are only allowed in specific situations set out by the ATO — not a default option.
• Keep tax invoices for five years. A clear photo or scan is fine.

ATO: Tax invoices ↗

Before you pay a contractor: what to check

• Their ABN is valid and active. Look it up at abr.business.gov.au — a quoted ABN can belong to a different entity, or already be cancelled.
• Whether they should be charging GST at all. The ABN lookup also shows their GST registration status. If they're not registered, they shouldn't be adding GST to the invoice, and you can't claim a credit for it.
• No ABN quoted on the invoice? You generally have to withhold 47% of the payment and send it to the ATO, unless an exception applies (the supplier is not running an enterprise and the payment is $75 or less excluding GST, they've given you a signed 'statement by a supplier', or they're an individual not acting in the course of a business, such as a one-off hobby sale).
• Whether the arrangement is really a contractor at all for super purposes. Someone paid mainly for their own labour and skills, even while invoicing through an ABN, can still be an employee for Superannuation Guarantee purposes — this is based on the terms of the contract, not just on having an ABN.
• Whether you need to lodge a Taxable Payments Annual Report (TPAR). Building and construction, cleaning, courier and road freight, IT, and security, investigation or surveillance businesses must report contractor payments to the ATO each year — due 28 August — so you'll need each contractor's ABN, name, address, and the total (including GST) you paid them.

ABN Lookup ↗ATO: No ABN withholding ↗ATO: Taxable payments annual report ↗

Quick checklist

• Invoice says 'Tax invoice', has the seller's name, ABN and issue date, and a description of what was supplied.
• Over $1,000? Your business name or ABN is on it too.
• GST is only charged — and only claimed — if the supplier is actually GST-registered.
• No ABN on the invoice means you may need to withhold 47% before paying.
• Building, cleaning, courier, IT or security business? Keep every contractor's ABN and the amounts paid, ready for your TPAR.

Not sure whether a particular invoice stacks up, or whether someone you're paying should be on your TPAR? Send it to us before you pay it — it's much easier to fix before the money moves than after.