Invoicing for Trades — Electricians, Plumbers & Builders

Invoicing basics for tradespeople

Whether you are a sole trader electrician or a building contractor, your invoices must meet the ATO's requirements for a valid tax invoice if you are GST-registered (turnover over $75,000 per year). Every invoice must include the words "tax invoice", your ABN, your business name, the date, a description of the work, the GST amount (or a statement that the total includes GST), and the total payable.

Use our free invoice generator to create an ATO-compliant tax invoice. For the full list of mandatory fields, see the Australian tax invoice requirements guide.

Separating labour and materials

While the ATO does not legally require you to separate labour from materials, doing so is strongly recommended for tradespeople. A clear breakdown:

• Makes it easier for clients to understand what they are paying for
• Helps resolve disputes about what was supplied or completed
• Supports your own job costing and profitability tracking
• Is often required under contract terms with builders or principal contractors

Example invoice structure for a trade job

Line item

Qty / hrs

Rate

Amount

Labour — installation (electrician)

6 hrs

$95/hr

$570.00

Materials — cable, conduit, fittings

—

—

$340.00

Travel charge

1 hr

$75/hr

$75.00

Subtotal (ex. GST)

$985.00

GST (10%)

$98.50

Total payable

$1,083.50

Progress claim invoices

On larger construction or installation projects, you will typically invoice at milestones rather than at completion. These are called progress claims. A progress claim invoice should:

• Be clearly labelled as a "Progress Claim" (as well as "Tax Invoice" if GST-registered)
• Reference the contract or work order number
• State the claim period (e.g. "Works completed to 28 June 2026")
• Show the cumulative contract value, amount previously claimed, and this claim amount
• Deduct any agreed retention

Security of Payment Act (SOPA) rights

Each Australian state and territory has Security of Payment legislation that gives construction contractors and subcontractors the right to receive progress payments on time. Key points:

• The legislation applies to most construction contracts (building, civil, plumbing, electrical, and related services)
• A compliant progress claim triggers a mandatory payment schedule from the principal or head contractor
• If no payment schedule is issued within the statutory period (typically 10 business days), the full claimed amount becomes due
• Adjudication is available for disputed claims — a low-cost alternative to litigation

SOPA legislation varies by state. Check the relevant legislation for your state: NSW, VIC, QLD, WA.

Retentions

A retention is a percentage (commonly 5%) of the contract value withheld by the principal until the defects liability period ends (typically 12 months after practical completion). On each progress claim, show the gross claim, less the retention amount, to arrive at the net amount due.

When the retention is released at the end of the defects period, issue a final invoice for the retention amount. Some states have retention trust account requirements — check the relevant SOPA legislation.

Invoicing for warranty work

If you return to fix defective work within your warranty period, this is generally not an additional charge — do not issue a new invoice unless the work is outside your warranty scope. If warranty work is disputed or out of scope, agree in writing before attending and issue a separate invoice with a clear description of why the work falls outside warranty.

GST on building services

Most building and trade services are taxable supplies subject to 10% GST. Key exceptions include:

• Supplies made to non-residents that relate to real property outside Australia (rare)
• Some subcontracting arrangements where the principal handles GST differently (seek accounting advice)

For ATO guidance on GST in the construction industry, see the ATO: GST and the building and construction industry.

Frequently asked questions

Can I charge for travel time on a trades invoice?

Yes, if your quote or agreement includes travel time as a chargeable item. List it as a separate line item — for example 'Travel: 1.5 hrs @ $X/hr'. If travel was not mentioned upfront, it is harder to enforce. Always agree on travel charges in your quote.

How do I invoice for materials only?

List each material as a separate line item with quantity, unit cost and total. Include your ABN and the words 'tax invoice' if you are GST-registered. GST applies to materials supplied as part of a taxable supply. If you are supplying materials under a construction contract, the Security of Payment Act may also apply.

What is a progress claim?

A progress claim is an invoice issued at a defined milestone during a construction or installation project, rather than at completion. Under most Australian Security of Payment legislation, a progress claim that meets the statutory requirements entitles you to payment within defined timeframes and gives you rights to suspend work if unpaid. Always mark progress claims clearly and include a reference to the contract or work order.

Do I need to separate labour and materials on my invoice?

The ATO does not legally require it, but it is strongly recommended. Separating labour from materials makes your invoice easier to audit, clearer for clients, and more useful for your own records. It also helps if a dispute arises about what was supplied.

What is a retention and how do I invoice for it?

A retention is a percentage of the contract sum (commonly 5–10%) withheld by the principal until the defects liability period expires. When the retention is released, you issue a final claim or adjustment invoice for that amount. Check your contract for the release conditions.

Related tools and resources

• Free Invoice Generator — create a trades tax invoice in minutes
• Australian Tax Invoice Requirements
• How to Get Paid Faster
• Payment Reminder Templates
• ATO: Building and construction industry