How to Invoice as a Consultant in Australia: Rates, Retainers and Corporate Clients

How to invoice as a consultant comes down to three decisions: how you price the work (day rate, hourly, fixed fee or retainer), what your client's accounts payable team needs before it will pay (usually a PO number and a supplier record), and whether GST applies. Get those right and a consulting invoice is a one-page document that gets paid on the first pass. Get them wrong and it sits in a rejected-invoice queue for a month.

This guide covers the decisions. If you just want the layout, the consultant invoice template already has the fields for day rates, retainers, expenses and a PO reference, and it's free with no signup.

How do consultants bill: day rate, hourly, fixed fee or retainer?

Most Australian consultants use one of four pricing models, and each one looks different on the invoice. The rule is the same for all of them: show the unit, the quantity and the rate, so the client can match the invoice to the contract without emailing you.

Two habits make any of these easier to pay. Name the period covered in the line description, and quote the contract or statement of work reference. A finance officer comparing your invoice against a purchase order needs both.

How do I invoice for milestones on a consulting project?

Invoice each milestone when the contract says it's reached, not on a fixed date. Each milestone invoice names the milestone, shows its share of the fixed fee and shows what has already been billed, so the client can see the running total against the contract value.

Say you've agreed a $24,000 + GST fixed fee for a market entry report, split 25% on signing, 50% on draft and 25% on final. That's three invoices of $6,000, $12,000 and $6,000 before GST. On the draft invoice, add a line such as "Previously invoiced: $6,000 of $24,000" so nobody has to dig out the first one. If the client needs to pay something before you start, a deposit invoice covers the first instalment, and consistent invoice numbering keeps the series traceable.

Milestones also matter for tax. The ATO's results test for personal services income looks at whether you're paid to produce a result, and it says payment on completion of specific objectives can include progress payments and deposits. More on that below.

Should I charge GST on expenses I pass on to the client?

If you're registered for GST and your consulting service is taxable, generally yes. The ATO's agency ruling, GSTR 2000/37, treats a client's reimbursement of costs you incur to perform your service as part of the price of that service, whether you itemise it or fold it into your fee.

The practical rule: on-charge the expense at its GST-exclusive cost, claim the GST credit on the original purchase yourself, then add GST once on your invoice subtotal. A flight that cost you $440 including $40 GST goes on the invoice at $400, and your 10% GST on the subtotal picks it up again.

The exception is a cost you pay purely as the client's paying agent, such as a fee the client owes a third party that you settle on their behalf. The same ruling says no GST is payable on reimbursement of a disbursement like that. It turns on the facts, so if you regularly pay costs on clients' behalf, confirm the treatment with your tax agent. If you're not registered for GST, on-charge the full amount you paid, with no GST line.

What do corporate and government clients need on a consultant invoice?

Large clients pay through an accounts payable process, and an invoice that doesn't match their records is sent back unpaid. The usual requirements are a purchase order number, an invoice addressed to the exact legal entity on the contract, your ABN and bank details matching your supplier record, and sending it to the AP inbox rather than your contact.

Before the first invoice, expect a supplier onboarding form. It typically asks for your ABN, GST status, bank details on letterhead or a bank statement, and often certificates of currency for professional indemnity and public liability insurance. Do it early; a missing supplier record is the most common reason a first consulting invoice is paid late.

For Australian Government work, the Department of Finance says a correctly rendered invoice is one that meets the requirements of your contract, and its typical inclusions list the purchase order or other reference number the buyer gave you. Under the Supplier Pay On-Time or Pay Interest Policy, non-corporate Commonwealth entities must then pay within 20 calendar days, or 5 calendar days for eInvoices sent through the Peppol network where both sides have agreed to use it. Our guide to eInvoicing and Peppol in Australia explains how to get set up.

Once the paperwork is right, the invoice itself still needs the tax invoice details. A registered consultant billing $1,000 or more also has to show the buyer's identity or ABN. The full list is in tax invoice requirements in Australia, and the Australian tax invoice generator checks those fields as you type.

What payment terms do large clients use?

Corporate clients usually set their own terms in the contract, often 30 days or 30 days from the end of the month, and they will apply them regardless of what your invoice says. Read the payment clause before you sign, because that's the number that actually decides when you're paid.

"30 days end of month" stretches further than it sounds: an invoice dated 3 October is due 30 November, 58 days later. If you have room to negotiate, ask for 14 days or for invoicing at month-end so the clock starts on the same day as theirs. For businesses with income over $100 million, you can check how they actually pay small suppliers on the Payment Times Reports Register, which is free to search by name or ABN.

Put the due date on the invoice as a date, not just "Net 30". Our guides cover invoice payment terms in Australia and chasing overdue invoices once a big client goes quiet.

How do I invoice an overseas client as a consultant?

If you're registered for GST, a consulting service to a client outside Australia is often GST-free. The ATO says a supply of a service is usually GST-free if the recipient is outside Australia, and that specific rules decide whether a particular supply qualifies.

On the invoice, show the line as GST-free with GST of $0.00. If you price in US dollars or another currency, say so next to every amount, state who pays transfer fees, and record the Australian dollar amount that actually lands in your account. Where the work is partly done for an Australian entity of the same group, or the overseas client has a presence here, the GST answer can change; that's a question for your tax agent. Our guide to adding GST to an invoice has the yes/no table for the other cases.

Contractor or employee: the PSI and super rules consultants should know

Two ATO rules can apply to consultants who work mostly for one client, and both look at how you're paid. Neither stops you invoicing, but they affect your tax and the client's super obligations.

• Personal services income (PSI). The ATO defines PSI as income produced mainly (more than 50%) from your personal skills or efforts. If the PSI rules apply, they limit the deductions you can claim. To self-assess as a personal services business, you either pass the results test, or pass another test and the 80% rule. The results test requires, for at least 75% of your PSI, being paid to produce a result, supplying your own tools or equipment, and fixing mistakes at your own cost. The ATO says hourly or daily pay makes it unlikely you meet the first condition.
• Super for contractors. The ATO says that if a business pays a contractor mainly for their labour, the contractor is an employee for super guarantee purposes, whether or not they have an ABN. Contracting through a company changes that, so large clients sometimes prefer it.

The takeaway for your invoices: if fixed-fee, result-based billing fits the work, it lines up better with the results test than a day rate does. Whether you pass is a judgement on your whole arrangement, so check with a registered tax agent rather than restructuring your pricing on a blog post.

Worked example: a day-rate consultant invoice over $1,000 with GST

A GST-registered Sydney consultant runs a six-day strategy review for a corporate client and flies to Canberra once for a stakeholder workshop. The contract is $1,250 a day plus GST, travel at cost, and the client issued PO 4500182736.

Check: 6 × $1,250 = $7,500; $7,500 + $400 = $7,900; 10% of $7,900 = $790; $7,900 + $790 = $8,690. The flight cost $440 including GST, so it's on-charged at $400 and the consultant claims the $40 credit separately. Because the total is over $1,000, the invoice names the client's legal entity and ABN, and the PO number sits in the header where AP will look for it. Your own ABN goes at the top, which is the whole point of an ABN invoice template.

Worked example: a monthly retainer invoice

A consultant charges a $3,000 + GST monthly advisory retainer that includes 10 hours, with extra hours at $280. In October the client used 13 hours.

Check: 3 × $280 = $840; $3,000 + $840 = $3,840; 10% = $384; total $4,224. Keeping the overage on its own line matters: the client can approve the retainer automatically and query only the extra hours. Decide in the contract whether unused hours roll over, and if they do, show the balance in the line description. To set this up once and reuse it each month, start from the free consulting invoice template for Australia and change only the period and the hours.

Common consultant invoicing mistakes

• No PO number. The invoice goes back unpaid and the 20- or 30-day clock never starts.
• Wrong entity. Billing "Acme" when the contract is with "Acme Services Pty Ltd" fails the three-way match in most AP systems.
• GST on GST. On-charging an expense at its GST-inclusive price and then adding 10%.
• Vague lines. "Consulting services – $9,500" invites a query. Units, rate and period don't.
• Invoicing a milestone early. If the contract ties payment to acceptance, an invoice sent before sign-off is usually rejected.

If you're weighing up software for all of this, we compared the options in invoicing software for consultants.

The short version

Put the unit, quantity and rate on every line. Get the PO number and supplier record sorted before the first invoice. On-charge expenses at their GST-exclusive cost and add GST once. Treat overseas clients as usually GST-free but check the rules. Keep an eye on how your pricing interacts with the PSI rules.

When you're running several retainers and waiting on corporate AP teams, a PDF and a calendar reminder only go so far. InvoiceSonic keeps your clients and invoice history in one place, and Pro (A$19/month, 7-day trial) adds recurring invoices, open tracking and overdue tracking.

This article is general information, not tax or legal advice. For your circumstances, check the ATO's personal services income guidance or a registered tax agent.

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