Invoice for Building Work: How to Write One (Deposits, Progress Claims, GST)

Invoice for building work in Australia starts as a normal tax invoice (if you're GST-registered) and adds the details builders get paid on: the site address, the contract or quote it relates to, the stage being claimed, approved variations as separate lines, and a running total of what's been paid. On residential jobs, the deposit you can invoice is capped by state law, and on many jobs your progress claim doubles as a Security of Payment claim. This guide covers each piece, with a worked progress claim at the end.

What must an invoice for building work show?

Start with the ATO's tax invoice requirements: "Tax Invoice", your business name and ABN, the date, a description with quantities and prices, and the GST. Because most building invoices are over $1,000, you also need the client's name or ABN. Then add the trade details that stop disputes.

The ATO rules are covered in full in our tax invoice requirements guide. The building-specific extras:

• Site address. The billing address and the job address are often different, and lenders and clients with more than one property query invoices that don't name the site.
• Contract or quote reference. "Per contract dated 2 September 2026" or "Quote Q-0318". It ties the invoice to the agreed price.
• Stage or work claimed. "Stage 2: frame complete", not "Progress payment".
• Variations as separate lines, each with its variation number.
• Contract summary on progress claims: contract price, variations to date, paid to date, this claim, balance remaining.
• Your licence number if you hold one. It costs nothing and matches what's on your contract.
• Due date and bank details. See what bank details to put on an invoice, including the line that protects clients from fake invoices.

How to write an invoice for building work, step by step

Write the invoice from the contract, not from memory. Every number on a building invoice should trace back to the signed contract, an approved variation or a completed stage.

1. Head it "Tax Invoice" (or "Invoice" if you're not registered for GST) and give it the next number in your sequence.
2. Add your details: business name, ABN, licence number, phone and email.
3. Add the client and the site: client name (and ABN for business clients), billing address, job address.
4. Reference the contract or quote and the stage or milestone you're claiming.
5. List the work: the stage amount, then each approved variation on its own line.
6. Show GST separately, and the total for this claim.
7. Add the contract summary on progress claims (paid to date and balance).
8. Add the Security of Payment statement where your state requires it (see below).
9. Set the due date per your contract and add payment details.

How much deposit can a builder invoice?

For residential building work, the deposit is capped by law, and the cap depends on your state and the contract price. NSW allows up to 10%. Victoria and Queensland cap it at 5% on contracts from around $20,000 (the table has the exact thresholds). Invoice more and you may be breaking the law, and the client may not be able to recover the excess under home warranty cover.

Victorian builders, note the change coming. Victoria's Domestic Building Contracts Amendment Act 2025 is due to take effect by 1 December 2026, and lets deposit limits and progress payment stages be set in regulations. Check Consumer Affairs Victoria before you sign contracts from late 2026.

A practical rule: work out the cap from the total contract price in the signed contract, and round down. On a $66,000 contract in NSW, the deposit invoice can be up to $6,600. The same job in Victoria or Queensland: $3,300.

On the GST side, the ATO treats a true security deposit (held against default) differently from a part payment of the price. Its ruling GSTR 2006/2 explains the difference. If you're unsure which yours is, ask your tax agent before you issue the first deposit invoice.

How do you invoice progress payments?

Invoice each stage in the contract's payment schedule only once that stage is complete, and show the running totals. A progress claim that matches the schedule word for word gets paid; one that claims "60% of the job" when the schedule says "frame" gets argued about. Our progress claim template has a copyable claim layout and the Security of Payment deadlines for every state.

The law backs this up. In NSW, contracts over $20,000 must have a progress payment schedule, and payments should line up with work actually completed. Victoria fixes the stage percentages for major domestic building contracts. For a contract covering all stages, Consumer Affairs Victoria lists:

Contracts that stop at lock-up or fixing use different percentages, so check the Consumer Affairs Victoria table for your contract type. In Queensland, the QBCC likewise expects progress payments to match the work completed.

Is your invoice a payment claim under Security of Payment laws?

Often, yes. Every state and territory has Security of Payment legislation that gives contractors a fast way to recover progress payments. Your invoice can be the payment claim that starts that process, but only if it contains what your state's law requires.

• NSW. For contracts from 21 October 2019, all payment claims must state that they are made under the Building and Construction Industry Security of Payment Act 1999. A claim must be in writing, state the amount and describe the work. The Act also covers owner-occupier construction contracts (work on a home the client lives in or plans to live in), according to NSW Government guidance.
• Victoria. A payment claim must identify the work, state the amount and say that it is made under the Building and Construction Industry Security of Payment Act 2002. The Building and Plumbing Commission notes that contracts between a builder and a home owner aren't covered, but contracts between that builder and its subcontractors and suppliers are.
• Queensland. Under the BIF Act, the QBCC says a payment claim must identify the work, state the amount and request payment, and that your usual tax invoice needs to meet those requirements to count.
• Other states and territories have their own Acts and forms. Check with your regulator.

The safe habit: put the statement on every progress claim in NSW and Victoria, for example "This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW)." Timelines and adjudication rules are strict, so if a client disputes a claim, get advice early rather than after the deadlines run.

How to invoice variations

Invoice a variation only after it's agreed in writing, and show it as its own line with the variation number and approved price. Bundling extras into a stage amount is the most common reason clients refuse to pay a progress claim.

Keep a simple variation register: number, date agreed, description, price ex GST, and which claim it was invoiced on. When the client asks "what's this $1,320?", you point to V1, signed on 18 September. Victoria's new law also introduces a single variation process for major domestic building contracts, so Victorian builders should review their variation paperwork before it starts.

How to show retention on an invoice

Retention is money the client holds back from each claim (often a percentage set in the contract) as security for defects, released at completion or after the defects period. Show the full claim, then the retention deducted, then the net amount payable, so both sides can track the total held.

Retention is far more common on commercial work and subcontracts than on residential renovations. The percentage, cap and release dates come from your contract. How GST applies to retained amounts depends on your contract terms and accounting method, so confirm the treatment with your tax agent rather than guessing on the invoice.

Should you split labour and materials?

You don't have to, but it often helps. The ATO requires a description, quantity and price for what you supply, not a labour/materials split. Splitting them makes variations easier to price and answers the client's first question on any big invoice.

For fixed-price stage claims, the contract price is what you invoice, so a split is optional. For do-and-charge work, small jobs and variations, list labour (hours × rate) and materials (by item or a materials total) separately. If you're GST-registered, GST applies to both when you supply them as part of the job. Don't add a hidden markup to "materials at cost"; if you charge a margin, price it openly.

GST on building work: what changes for progress claims?

If you're registered for GST, add 10% to your building work and issue tax invoices. With progress payments, each stage is generally treated as a separate supply for GST, so you account for the GST on each claim rather than all at once at the end.

The ATO's ruling GSTR 2000/35 uses "progress payments on a house construction contract" as its example of progressive consideration, and says GST is attributed as if each progressive component were a separate supply. In practice: the GST on Claim 2 goes in the BAS for the period you issue that invoice or receive payment for it, whichever comes first (or when you're paid, if you account for GST on a cash basis). If you're not registered for GST, invoice without GST and check the $75,000 registration threshold, which a couple of renovations can cross quickly. The GST calculator handles the 10% and one-eleventh maths.

Worked example: a progress claim invoice for building work

A NSW bathroom and laundry renovation. Contract price $66,000 including GST ($60,000 + $6,000 GST), signed with a payment schedule. The deposit and Stage 1 are paid. This is Claim 2, with one approved variation.

The invoice for Claim 2 looks like this:

• Tax Invoice INV-0207, issued 10 October 2026, due 24 October 2026 (per contract)
• From: Sam Lee Carpentry Pty Ltd, ABN 12 345 678 901, Contractor licence 123456C
• To: Priya and Tom Nguyen. Site: 14 Example Street, Marrickville NSW
• Re: Contract dated 2 September 2026, Progress Claim 2
• Stage 2: tiling and fit-off complete (40% of $60,000) = $24,000.00
• Variation V1 (approved 18 September 2026): additional shower niche = $1,200.00
• Subtotal $25,200.00 + GST $2,520.00 = Total this claim $27,720.00
• Contract summary: contract price $66,000.00 + variations $1,320.00 = $67,320.00 · Paid to date $23,100.00 · This claim $27,720.00 · Balance after this claim $16,500.00
• "This is a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW)."
• Payment: account name, BSB, account number, reference INV-0207

Check the maths the way a client's lender will. $23,100 paid + $27,720 this claim + $16,500 remaining = $67,320, the contract plus the variation. The balance equals Stage 3 exactly, because the variation is fully billed in this claim. If those numbers don't reconcile on your own invoice, fix it before you send it.

Paying subcontractors? You may need to lodge a TPAR

If your business is mainly in building and construction, has an ABN and pays contractors or subcontractors for building and construction services, the ATO requires a Taxable payments annual report (TPAR) by 28 August each year. Payments to employees aren't included.

The ATO says you're primarily in building and construction if, for example, 50% or more of your business income in the current financial year comes from building and construction services (there are other tests too). See the ATO's building and construction TPAR page. The easy way to make TPAR painless is to insist on proper invoices from every subbie, with their ABN, the amount paid and the GST, and file them by financial year. Our TPAR guide covers what to report and how to lodge, and if a head contractor wants to issue recipient created tax invoices instead of receiving yours, check the RCTI rules first.

Builders are a target for fake invoices

Large progress payments make building invoices a target for payment-redirection scams. The Australian Cyber Security Centre has warned that cybercriminals target builders and construction companies, emailing their customers to "update" the bank details for future invoice payments. Put a line on every claim saying your bank details will never change by email, and tell clients at contract signing to phone you before paying any changed details. Our guide to bank details on invoices has wording you can copy.

Common mistakes on building invoices

• Deposit over the state cap, often from forgetting the $20,000 threshold in VIC and QLD.
• Claiming a stage before it's complete, which gives the client a legitimate reason to withhold payment.
• Unsigned variations billed as if agreed.
• No Security of Payment statement on NSW and Victorian claims.
• Vague due dates. Use the contract's terms, or see invoice payment terms for small jobs without one.

When a claim does go overdue, follow a set process: see how to chase overdue invoices.

Quote first, then invoice

Most building payment disputes start with a vague quote. Price the job with the free quote generator, get it accepted in writing, then invoice from the same line items using the Australian tax invoice generator. For one-off jobs, the carpenter and tradie templates are ready to fill in.

Once you're running several jobs with deposits and stage claims, the PDF-and-spreadsheet approach starts to leak money. InvoiceSonic Pro (A$19/month, 7-day trial, card required) handles online quote acceptance that converts to an invoice, overdue and aging tracking, open tracking and automatic reminders, across web and mobile. The free plan covers 3 saved invoices a month if you want to try it first.

This article is general information, not legal, building or tax advice. Building laws differ between states and change over time; the rules above were checked against the linked regulator and ATO pages in October 2026. For your contract, check your state regulator, a lawyer or a registered tax agent.

Frequently asked questions