How to Invoice for Materials and Labour
Any job that combines parts and people needs both shown clearly. Separate materials from labour, get the GST right on each, and the client can approve the total at a glance.
In this answer
- Present materials and labour as distinct, readable sections
- Decide how to handle markup on materials
- Apply GST correctly across both components
- Reference supplier costs without drowning the client in dockets
- Reconcile the invoice back to the original quote
6 min
Two sections, one clear total
The clearest invoices for parts-and-labour jobs use two distinct sections: a materials block and a labour block, each with its own subtotal, then a combined total. The client can sanity-check each side independently, which builds trust and heads off the 'why is this so much?' email.
Under materials, list significant items by name and quantity. Under labour, show hours at your rate or a fixed price per task. Two subtotals and a grand total read far better than a dozen unsorted lines jumbled together, and they make the invoice feel professionally prepared.
Decide your markup approach upfront
Marking up materials is standard practice — it covers your time sourcing, collecting and warranting the parts. What matters is consistency with what you quoted. If your quote said 'materials at cost plus 15%', the invoice should reflect that, not a different number.
You generally do not need to expose your supplier cost and margin on the invoice itself; you show the price the client agreed to pay. Just keep your own records so that if a client ever queries a line, you can explain it calmly with the docket behind it.
Get GST right on both parts
If you are registered for GST, the 10% generally applies to the whole taxable supply — materials and labour alike — not just one part. Show it as a single GST line on the subtotal, label the document 'Tax Invoice', and you are done.
- Materials subtotal
- Labour subtotal
- Combined subtotal
- GST (if registered)
- Total due
This is general information, not tax advice — if a job involves GST-free or mixed items, confirm the treatment with your accountant.
What to include, and reconciling to the quote
Your materials-and-labour checklist:
- 'Tax Invoice' and a unique number, plus your ABN
- Client name and site or job reference
- Materials section with itemised lines and a subtotal
- Labour section with hours or task pricing and a subtotal
- Any approved variations on their own lines
- Combined subtotal, GST and total due
- Payment details and a due date
The final total should reconcile to your quote unless variations changed the scope. Build the layout once with the free Invoice Generator and reuse it across jobs.
Key takeaways
- Use two sections — materials and labour — each with its own subtotal
- Apply markup consistently with what you quoted, and keep your dockets
- GST generally applies across the whole taxable supply, shown as one line
- Put approved variations on separate lines so the total still reconciles
- Reuse one template so every job invoice looks the same
Frequently asked questions
Do I have to show what the materials cost me?
No. You show the price the client agreed to pay, which can include your markup. Keep supplier records yourself so you can justify a line if it is ever queried.
Is GST charged on labour as well as materials?
For a GST-registered business, the 10% generally applies to the whole taxable supply, including labour. Some items can be GST-free, so check mixed jobs with your accountant. This is general information, not tax advice.
What if material prices rose between quote and invoice?
If your quote allowed for it, or you flagged the increase and the client agreed, show the updated price as an approved variation. If you simply absorbed a small rise, invoice the quoted figure to keep the client's trust.
Build a compliant invoice in minutes
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.