Free Contractor Invoice Generator

What Is a Contractor Invoice?

A contractor invoice is a formal document that an independent contractor sends to a client to request payment for work completed. Unlike employees who receive a regular payslip from their employer, contractors are responsible for billing their own clients. The invoice serves as both a payment request and a legal record of the transaction between two businesses.

Contractor invoices are used by sole traders, subcontractors, freelancers, tradespeople, and any individual or business operating as an independent contractor rather than an employee. In the Australian construction and industrial sectors, subcontractors routinely invoice head contractors for labour, plant hire, and materials supplied on a project-by-project basis.

The key difference between a contractor invoice and an employee's pay is who controls the process. An employee's pay is calculated and issued by the employer, who withholds PAYG tax and pays superannuation on the employee's behalf. A contractor sets their own rate, issues their own invoice, and is responsible for paying their own tax, super, and insurance. This distinction matters because misclassifying an employee as a contractor — known as sham contracting — carries significant penalties under Australian law.

What to Include on a Contractor Invoice in Australia

A valid contractor invoice in Australia must include specific details to satisfy both ATO requirements and the practical needs of the client's accounts payable team. Missing any of these fields can delay payment or create compliance issues at BAS time.

• Your ABN. Every contractor invoice must show your Australian Business Number. If you don't include an ABN, the paying business must withhold 47% of the payment under PAYG withholding rules — regardless of your actual tax rate.
• Your business or trading name. Use the name registered with your ABN. If you trade under a different name, include both.
• The words "Tax Invoice". Required if you are registered for GST and the invoice amount is AU$82.50 or more (GST inclusive). If you are not GST-registered, do not use this label — simply title it "Invoice".
• Invoice number and date. A unique, sequential invoice number and the date the invoice is issued. Consistent numbering prevents duplicate payment errors and supports your record-keeping obligations.
• Description of work performed. Specific descriptions of the services provided, including the project name or site address, the nature of the work, and the period covered. "Labour — formwork installation, 42 Smith St, Parramatta, 3–7 June 2026" is far better than "Services rendered".
• Hours worked and hourly rate (or fixed amount). Show the breakdown so the client can verify the total. For fixed-price contracts, reference the relevant contract clause or quote number.
• GST amount. If GST-registered, show the GST component separately or state that the total price includes GST. If not registered, make sure GST is not shown on the invoice.
• Total amount payable. The final amount including or excluding GST as applicable.
• Payment terms. State when payment is due — for example, "Net 30" (30 days from invoice date) or "Due on receipt".
• Bank details. Include your BSB, account number, and account name to enable direct bank transfer, which is the most common payment method for contractor invoices in Australia.

How to Create a Contractor Invoice

Use the free tool above to generate a professional contractor invoice in minutes. Here is the process step by step:

1. Enter your contractor details. Add your business name, ABN, contact information, and address. Upload your logo to give the invoice a professional appearance.
2. Add the client's details. Enter the client's business name, contact name, and address. Include a unique invoice number and the date of issue.
3. Describe the work and enter your rates. Add line items for each piece of work. Include hours worked and your hourly rate, or enter a fixed amount for lump-sum jobs. Select whether GST applies to each item — the tool calculates subtotals, GST, and the total automatically.
4. Set payment terms and bank details. Choose your payment terms and enter your BSB, account number, and account name so the client knows exactly how and when to pay.
5. Preview and download. Check the live preview, then download the invoice as a PDF. Email it to your client or print a copy for your records.

Contractor Invoice vs Employee Payslip

Understanding the difference between a contractor invoice and an employee payslip is important for both compliance and payment processing. Here is a side-by-side comparison:

GST on Contractor Invoices

Whether a contractor needs to charge GST depends on their GST registration status. In Australia, you must register for GST if your annual turnover is AU$75,000 or more (or AU$150,000 for non-profit organisations). Below that threshold, registration is optional — but once registered, you must charge 10% GST on all taxable supplies.

When a GST-registered contractor issues an invoice, the GST component must be clearly shown. For example, if the work totals AU$2,000 excluding GST, the invoice should show AU$2,000 + AU$200 GST = AU$2,200 total. Alternatively, the invoice can state that the total of AU$2,200 includes GST. The client, if also GST-registered, can then claim the AU$200 as an input tax credit on their next BAS.

Contractors who are not registered for GST must not charge GST or label their document a "Tax Invoice". Doing so is misleading and can result in penalties. Instead, they issue a standard invoice without any GST component. The paying business cannot claim a GST input tax credit on these invoices.

For contractors working in the building and construction industry, there is an additional requirement: businesses paying contractors for building and construction services must report those payments to the ATO annually via the Taxable Payments Annual Report (TPAR). This means the details on your contractor invoice — ABN, amounts paid, GST status — are cross-checked by the ATO against your own tax return.

Frequently Asked Questions

Do contractors need an ABN to invoice?

Yes. Every contractor operating in Australia needs an ABN to invoice for their services. If you supply an invoice without an ABN, the paying business is legally required to withhold 47% of the payment amount under the PAYG withholding no-ABN rules. Registering for an ABN is free and can be done online through the Australian Business Register.

What payment terms are standard for contractor invoices?

Net 30 is the most common payment term for contractor invoices in Australia, meaning payment is due within 30 calendar days of the invoice date. Net 14 and Due on Receipt are also widely used, particularly for smaller jobs or new client relationships. In the construction industry, payment timeframes may be governed by Security of Payment legislation, which varies by state but generally requires payment within 10 to 15 business days of a valid payment claim.

Can contractors claim GST credits on business expenses?

Only if the contractor is registered for GST. GST-registered contractors can claim input tax credits for GST included in the price of business purchases — tools, equipment, materials, vehicle running costs, insurance, and professional services. These credits are claimed on the Business Activity Statement (BAS), which is typically lodged quarterly. To claim a credit, you need a valid tax invoice from the supplier.

How should I number my contractor invoices?

Use a sequential numbering system that makes each invoice unique and easy to track. Many contractors start with a prefix (e.g. "INV-001" or "2026-001") and increment with each new invoice. Avoid gaps or duplicate numbers, as these can flag issues during audits and cause confusion for your client's AP team. This tool assigns a sequential number automatically, which you can adjust if needed.