[{"data":1,"prerenderedAt":1400},["ShallowReactive",2],{"page-\u002Fhow-to-bill-clients-for-expenses":3,"related-\u002Fhow-to-bill-clients-for-expenses":459},{"id":4,"title":5,"author":6,"body":7,"category":445,"date":446,"dek":447,"description":448,"extension":449,"featured":450,"meta":451,"navigation":452,"path":453,"readingTime":454,"seo":455,"sitemap":456,"stem":457,"__hash__":458},"content\u002Fhow-to-bill-clients-for-expenses.md","How to Bill Clients for Expenses: Reimbursable Expenses on Invoices","Daniel Reed",{"type":8,"value":9,"toc":429},"minimark",[10,15,19,27,30,34,37,50,53,76,79,83,86,92,98,105,108,112,115,120,257,263,266,275,279,290,295,310,320,333,337,345,349,362,373,377,384,387,391,426],[11,12,14],"h2",{"id":13},"what-counts-as-a-reimbursable-expense-and-what-doesnt","What counts as a reimbursable expense (and what doesn't)",[16,17,18],"p",{},"A reimbursable expense is a cost you incur on a project that the client has agreed to pay back. You front the money, then recharge it. Classic examples: a train fare to a client site, a stock photo licence bought for their brochure, a domain and hosting plan set up in their name, or a specialist subcontractor you hired to finish part of the job.",[16,20,21,22,26],{},"What is ",[23,24,25],"em",{},"not"," reimbursable is your ordinary cost of being in business. Your laptop, your accounting software subscription, your home office internet, your professional insurance — those are overhead. You recover them through your rate, not by itemising them on a client invoice. The line matters because clients push back hard when they see costs they consider \"your problem\" appearing on a bill.",[16,28,29],{},"The cleanest test: would this cost exist if the project didn't? A flight booked specifically for one client's workshop fails the \"would exist anyway\" test, so it's reimbursable. Your Adobe subscription would exist regardless, so it's overhead.",[11,31,33],{"id":32},"agree-the-rules-before-you-spend-a-penny","Agree the rules before you spend a penny",[16,35,36],{},"Most expense disputes are really scope disputes that surfaced late. Kill them in the contract or proposal. A short clause is enough:",[38,39,40],"blockquote",{},[16,41,42],{},[23,43,44,45,49],{},"Expenses: The Client will reimburse pre-approved out-of-pocket costs incurred on this project, including travel, accommodation, third-party software licences, and subcontractor fees. Costs above $150 per item require written approval in advance. Expenses are billed at cost and supported by receipts. Mileage is charged at ",[46,47,48],"span",{},"rate"," per mile.",[16,51,52],{},"Three things that clause does for you:",[54,55,56,64,70],"ul",{},[57,58,59,63],"li",{},[60,61,62],"strong",{},"Sets an approval threshold."," Anything above the limit needs a yes in writing. Below it, you're covered to just spend and recharge.",[57,65,66,69],{},[60,67,68],{},"States the markup policy up front"," (here, \"at cost\" — no markup). Decide this deliberately; more on markup below.",[57,71,72,75],{},[60,73,74],{},"Requires receipts",", which signals you'll keep clean records and pre-empts the \"can you prove that?\" conversation.",[16,77,78],{},"Get the client to confirm expensive items by email before you commit. A one-line \"Booking the Tuesday flight at £142, confirming that's approved\" costs you nothing and turns a possible fight into a paper trail.",[11,80,82],{"id":81},"to-mark-up-or-not-to-mark-up","To mark up or not to mark up",[16,84,85],{},"There are two honest positions, and clients treat them very differently.",[16,87,88,91],{},[60,89,90],{},"Billing at cost (pass-through)."," You recharge exactly what you paid. A £142 flight becomes a £142 line. This is the norm for genuine third-party disbursements and it builds trust because there's nothing to argue about. The downside: you carry the cash-flow burden and admin for free.",[16,93,94,97],{},[60,95,96],{},"Adding a handling markup."," Some agencies add 10–20% to expenses to cover the time spent booking, coordinating, and financing the cost. This is legitimate as long as it's disclosed. What damages relationships is a hidden markup a client discovers by seeing the original receipt. If you mark up, either state the percentage in your contract or fold the handling into a separate \"coordination fee\" line rather than inflating the receipt total.",[16,99,100,101,104],{},"A middle path many freelancers use: pass genuine disbursements through at cost, but bill your own ",[23,102,103],{},"time"," spent managing a subcontractor or sourcing materials as normal billable hours. That keeps the expense honest and still pays you for the work.",[16,106,107],{},"For mileage, use your tax authority's standard rate as a defensible number rather than guessing. In the US the IRS sets an annual business mileage rate; the UK uses HMRC approved mileage allowance payments (commonly quoted as 45p per mile for the first 10,000 miles); Canada and Australia publish their own per-kilometre figures. These change, so check the current rate for your country each tax year.",[11,109,111],{"id":110},"how-to-list-expenses-on-the-invoice","How to list expenses on the invoice",[16,113,114],{},"Keep expenses visually distinct from your fees. Clients scan invoices, and burying a £600 subcontractor cost inside your service total invites suspicion. Two structures work well.",[16,116,117],{},[60,118,119],{},"Option A — a dedicated expenses block:",[121,122,123,142],"table",{},[124,125,126],"thead",{},[127,128,129,133,136,139],"tr",{},[130,131,132],"th",{},"Description",[130,134,135],{},"Qty",[130,137,138],{},"Rate",[130,140,141],{},"Amount",[143,144,145,160,173,186,198,210,225,241],"tbody",{},[127,146,147,151,154,157],{},[148,149,150],"td",{},"Web design services (June)",[148,152,153],{},"22 hrs",[148,155,156],{},"$85",[148,158,159],{},"$1,870.00",[127,161,162,167,169,171],{},[148,163,164],{},[60,165,166],{},"Reimbursable expenses",[148,168],{},[148,170],{},[148,172],{},[127,174,175,178,181,184],{},[148,176,177],{},"Stock photography licence (invoice #A-2231)",[148,179,180],{},"1",[148,182,183],{},"$79.00",[148,185,183],{},[127,187,188,191,193,196],{},[148,189,190],{},"Return train fare, London↔Bristol (12 Jun)",[148,192,180],{},[148,194,195],{},"$64.00",[148,197,195],{},[127,199,200,203,205,208],{},[148,201,202],{},"Subcontractor: copywriting (J. Okafor)",[148,204,180],{},[148,206,207],{},"$450.00",[148,209,207],{},[127,211,212,217,219,221],{},[148,213,214],{},[60,215,216],{},"Subtotal — services",[148,218],{},[148,220],{},[148,222,223],{},[60,224,159],{},[127,226,227,232,234,236],{},[148,228,229],{},[60,230,231],{},"Subtotal — expenses",[148,233],{},[148,235],{},[148,237,238],{},[60,239,240],{},"$593.00",[127,242,243,248,250,252],{},[148,244,245],{},[60,246,247],{},"Total",[148,249],{},[148,251],{},[148,253,254],{},[60,255,256],{},"$2,463.00",[16,258,259,262],{},[60,260,261],{},"Option B — a separate expenses invoice"," entirely, cross-referenced to the project. Useful when expenses are large or arrive on a different timeline than your fees, and when a client's accounts team codes reimbursements to a different budget.",[16,264,265],{},"Either way, name the specific supplier, date, and purpose on each line. \"Travel — $64\" is weak. \"Return train fare, London↔Bristol, 12 Jun client workshop — $64\" gets approved without a follow-up email. Attach the underlying receipts as a PDF; don't wait to be asked.",[16,267,268,269,274],{},"If you're building invoices by hand, the layout principles in ",[270,271,273],"a",{"href":272},"\u002Fhow-to-make-an-invoice-in-excel-word-google-docs","how to make an invoice in Excel, Word or Google Docs"," apply here too — a clean expenses subtotal is just another block.",[11,276,278],{"id":277},"the-vat-and-sales-tax-part-people-get-wrong","The VAT and sales-tax part people get wrong",[16,280,281,282,285,286,289],{},"This is where recharging expenses gets genuinely technical, and the rules differ by tax and by country. Two concepts get confused constantly: ",[60,283,284],{},"recharges"," and ",[60,287,288],{},"disbursements",".",[291,292,294],"h3",{"id":293},"recharges-vs-disbursements-vat-registered-businesses","Recharges vs disbursements (VAT-registered businesses)",[16,296,297,298,301,302,305,306,309],{},"A ",[60,299,300],{},"recharge"," is a cost you incurred ",[23,303,304],{},"for your own business"," in order to deliver the service, which you then pass on. Your train fare to a client meeting is your cost — you bought the ticket, you travelled. When you recharge it, it becomes part of the consideration for your service, so in the UK and similar VAT systems you generally add VAT to it at your service rate, ",[23,307,308],{},"even if the original ticket was zero-rated or VAT-exempt",". That surprises people: a zero-rated train fare recharged to a client typically gets 20% VAT added because it's now part of your taxable supply.",[16,311,297,312,315,316,319],{},[60,313,314],{},"disbursement"," is a cost you paid ",[23,317,318],{},"as the client's agent"," — the goods or services were supplied to the client, not to you, and you merely handled the payment. A statutory fee (say, a companies-registry filing fee paid on the client's behalf) can qualify. Disbursements are passed on at exact cost with no VAT added by you, but they must meet strict conditions: the client received the supply, you were acting as their agent, and you show the cost separately. Getting this wrong means under- or over-charging VAT.",[16,321,322,323,327,328,332],{},"Practical takeaway for UK and EU-style VAT: most of what freelancers call \"expenses\" are actually recharges, not disbursements, so you add VAT. Read ",[270,324,326],{"href":325},"\u002Fuk-vat-invoices-explained","UK VAT invoices explained"," and, if you're near the threshold, ",[270,329,331],{"href":330},"\u002Fdo-i-need-to-register-for-vat","do I need to register for VAT",". Rules vary — confirm your specific situation with HMRC or an accountant.",[291,334,336],{"id":335},"us-sales-tax","US sales tax",[16,338,339,340,344],{},"Whether a reimbursed expense is taxable depends on the state and on whether the underlying item was taxable and how it's characterised. Reimbursed costs that are part of a bundled taxable service can be taxable; a separately stated pass-through of a non-taxable item may not be. There's no single national rule. The overview in ",[270,341,343],{"href":342},"\u002Fus-sales-tax-on-invoices","US sales tax on invoices"," is a starting point, but check your state.",[291,346,348],{"id":347},"canada-and-australia","Canada and Australia",[16,350,351,352,356,357,361],{},"For GST\u002FHST in Canada, recharged expenses generally follow the tax treatment of your overall supply; see ",[270,353,355],{"href":354},"\u002Fcanada-gst-hst-invoice-requirements","Canada GST\u002FHST invoice requirements",". In Australia, GST on reimbursements versus true disbursements follows a similar agent-vs-principal logic to the UK; a valid ",[270,358,360],{"href":359},"\u002Fwhat-is-a-tax-invoice-australia","tax invoice"," still needs the right GST breakdown.",[16,363,364,365,368,369,372],{},"One more trap: ",[60,366,367],{},"don't double-count VAT\u002FGST you've already reclaimed."," If you're VAT-registered and reclaimed the input tax on that £79 stock photo, you recharge the £79 net (pre-VAT) figure and add your own VAT on top. Recharging the VAT-inclusive amount ",[23,370,371],{},"and"," adding VAT again overcharges the client.",[11,374,376],{"id":375},"keep-the-receipts-and-keep-them-findable","Keep the receipts, and keep them findable",[16,378,379,380,289],{},"Every recharged cost needs a supporting document you can produce on demand: the supplier invoice, the ticket, the mileage log. Tax authorities can ask you to justify both the expense you claimed and the amount you recharged. Retention periods vary (commonly several years), so store them with the project. The practical mechanics are covered in ",[270,381,383],{"href":382},"\u002Fhow-long-to-keep-invoices-and-receipts","how long to keep invoices and receipts",[16,385,386],{},"A simple system: create a folder per project, drop every receipt in as you incur it, and log the date, supplier, amount, and whether tax was charged in a spreadsheet. When invoice day arrives the expenses block writes itself.",[11,388,390],{"id":389},"handling-the-awkward-cases","Handling the awkward cases",[54,392,393,399,409,420],{},[57,394,395,398],{},[60,396,397],{},"The client rejects an expense after the fact."," If it was under your approval threshold and inside the contract's categories, point to the clause. If it was over the threshold and you didn't get sign-off, you may have to eat it — which is exactly why the threshold exists.",[57,400,401,404,405,408],{},[60,402,403],{},"A subcontractor you're recharging."," You're the principal: you hired them, you pay them, you recharge the client. Their invoice is addressed to ",[23,406,407],{},"you",", and you issue your own invoice to the client. Don't just forward the sub's invoice.",[57,410,411,414,415,419],{},[60,412,413],{},"Foreign-currency expenses on an overseas project."," Convert at the rate on the date you paid, note the rate, and be consistent. ",[270,416,418],{"href":417},"\u002Fhow-to-invoice-international-clients","Invoicing international clients"," covers the currency and payment side.",[57,421,422,425],{},[60,423,424],{},"Expenses that arrive after final payment."," Bill them promptly on a short-dated invoice rather than sitting on them. A late \"oh, and there's also £200 of expenses\" three months on reads as disorganised and gets queried.",[16,427,428],{},"Recharging expenses well is mostly about being boringly transparent: agree the rules in writing, spend inside the agreed limits, itemise clearly, attach the receipts, and apply the right tax treatment for your jurisdiction. Do that and expenses stop being a source of friction and become just another clean line on the invoice.",{"title":430,"searchDepth":431,"depth":431,"links":432},"",3,[433,435,436,437,438,443,444],{"id":13,"depth":434,"text":14},2,{"id":32,"depth":434,"text":33},{"id":81,"depth":434,"text":82},{"id":110,"depth":434,"text":111},{"id":277,"depth":434,"text":278,"children":439},[440,441,442],{"id":293,"depth":431,"text":294},{"id":335,"depth":431,"text":336},{"id":347,"depth":431,"text":348},{"id":375,"depth":434,"text":376},{"id":389,"depth":434,"text":390},"Invoicing Basics","2026-07-29",null,"How to recharge travel, materials, software and subcontractor costs to clients, whether to add markup, and how VAT and sales-tax rules apply.","md",false,{},true,"\u002Fhow-to-bill-clients-for-expenses","8 min read",{"title":5,"description":448},{"loc":453},"how-to-bill-clients-for-expenses","RpKUmFUK7kvh-_hOs2fJkgj3NKtNotmV5Fped0xpX-s",[460,975],{"id":461,"title":462,"author":6,"body":463,"category":445,"date":967,"dek":447,"description":968,"extension":449,"featured":450,"meta":969,"navigation":452,"path":970,"readingTime":454,"seo":971,"sitemap":972,"stem":973,"__hash__":974},"content\u002Fwhat-is-progress-billing.md","What Is Progress Billing? How to Invoice a Project in Stages",{"type":8,"value":464,"toc":957},[465,469,472,475,488,492,495,516,523,529,535,538,542,545,548,686,697,701,704,721,724,727,786,789,797,801,804,810,826,832,837,840,846,852,856,859,864,872,877,897,900,904,907,944,948,951,954],[11,466,468],{"id":467},"getting-paid-before-the-project-ends","Getting paid before the project ends",[16,470,471],{},"A web build quoted at $18,000 takes four months. If you invoice once at the end, you're effectively lending the client the cost of a third of a year's work, absorbing every scope change and stall, and betting your cash flow on a single payment that may arrive 30 days after the final sign-off. That's month five before a dollar lands.",[16,473,474],{},"Progress billing fixes this. Instead of one invoice, you break the project into stages and bill for each as you complete it. The client pays as value is delivered; you fund the work as you go. It's the standard model in construction, engineering, and large creative or software projects, and it scales down neatly to a solo freelancer running a $6,000 branding job.",[16,476,477,478,482,483,487],{},"This is different from a one-off ",[270,479,481],{"href":480},"\u002Fhow-to-ask-for-a-deposit-upfront-invoices","deposit invoice"," or a fixed monthly ",[270,484,486],{"href":485},"\u002Frecurring-and-retainer-invoices","retainer",". A deposit is a single upfront payment. A retainer bills a recurring fee regardless of specific deliverables. Progress billing charges incrementally against measurable chunks of one large project as they're finished.",[11,489,491],{"id":490},"how-progress-billing-actually-works","How progress billing actually works",[16,493,494],{},"Every progress-billed project rests on three decisions you make before you start:",[496,497,498,504,510],"ol",{},[57,499,500,503],{},[60,501,502],{},"The total contract value."," The agreed price for the whole job (or a clear rate structure if it's time-and-materials).",[57,505,506,509],{},[60,507,508],{},"The billing triggers."," What event releases each invoice, a calendar date, a completed milestone, or a percentage of work done.",[57,511,512,515],{},[60,513,514],{},"The schedule of values."," A line-by-line breakdown showing how the total is split across stages.",[16,517,518,519,522],{},"Two broad methods exist for deciding ",[23,520,521],{},"when"," to bill:",[16,524,525,528],{},[60,526,527],{},"Milestone billing."," You invoice when a defined deliverable is complete: \"homepage design approved,\" \"database migration signed off.\" Best when the work has clear, discrete stages. Clients like it because they're paying for something they can see.",[16,530,531,534],{},[60,532,533],{},"Percentage-of-completion billing."," You invoice based on how much of the total work is finished, often assessed monthly. A builder might bill for 40% of a job at the end of month two. This suits long, continuous work where deliverables blur together. It requires an honest, defensible way to estimate \"percent complete,\" which is where disputes usually start.",[16,536,537],{},"Most small-business projects use milestones. They're concrete and hard to argue with.",[11,539,541],{"id":540},"building-a-schedule-of-values","Building a schedule of values",[16,543,544],{},"The schedule of values is the backbone. It's a table, agreed in the contract, that both parties reference for the life of the project. Keep the number of stages sensible: too few and you're back to lump-sum risk, too many and you drown in admin.",[16,546,547],{},"Here's a schedule for that $18,000 website, split into five stages plus a deposit:",[121,549,550,567],{},[124,551,552],{},[127,553,554,557,559,562,564],{},[130,555,556],{},"Stage",[130,558,132],{},[130,560,561],{},"% of total",[130,563,141],{},[130,565,566],{},"Trigger",[143,568,569,586,602,617,634,649,666],{},[127,570,571,574,577,580,583],{},[148,572,573],{},"0",[148,575,576],{},"Mobilisation deposit",[148,578,579],{},"20%",[148,581,582],{},"$3,600",[148,584,585],{},"On contract signing",[127,587,588,590,593,596,599],{},[148,589,180],{},[148,591,592],{},"Discovery & sitemap approved",[148,594,595],{},"15%",[148,597,598],{},"$2,700",[148,600,601],{},"Client sign-off on IA",[127,603,604,607,610,612,614],{},[148,605,606],{},"2",[148,608,609],{},"Design mockups approved",[148,611,579],{},[148,613,582],{},[148,615,616],{},"Client sign-off on designs",[127,618,619,622,625,628,631],{},[148,620,621],{},"3",[148,623,624],{},"Development complete (staging)",[148,626,627],{},"25%",[148,629,630],{},"$4,500",[148,632,633],{},"Site live on staging server",[127,635,636,639,642,644,646],{},[148,637,638],{},"4",[148,640,641],{},"Testing, revisions, launch",[148,643,595],{},[148,645,598],{},[148,647,648],{},"Site live on production",[127,650,651,654,657,660,663],{},[148,652,653],{},"5",[148,655,656],{},"Retention release",[148,658,659],{},"5%",[148,661,662],{},"$900",[148,664,665],{},"30 days after launch, no defects",[127,667,668,670,674,679,684],{},[148,669],{},[148,671,672],{},[60,673,247],{},[148,675,676],{},[60,677,678],{},"100%",[148,680,681],{},[60,682,683],{},"$18,000",[148,685],{},[16,687,688,689,692,693,696],{},"Notice stage 5. That's ",[60,690,691],{},"retainage"," (also called retention), a slice of the total held back until after final delivery to guarantee you fix defects. It's ingrained in construction, where 5–10% is typical, and it's increasingly reasonable for larger creative and software work. As the contractor being billed ",[23,694,695],{},"against",", you want retainage low and released quickly; as the party doing the work, you accept it because it reassures a nervous client. State the release condition precisely: \"5% retained, payable 30 days after production launch provided no critical defects remain open.\"",[11,698,700],{"id":699},"what-goes-on-each-progress-invoice","What goes on each progress invoice",[16,702,703],{},"A progress invoice looks like a normal invoice with a few extra fields that show where this payment sits in the bigger picture. Every one should show:",[54,705,706,709,712,715,718],{},[57,707,708],{},"The overall contract value",[57,710,711],{},"This stage's amount (the \"current claim\")",[57,713,714],{},"Total billed to date, including this invoice",[57,716,717],{},"Total remaining after this invoice",[57,719,720],{},"Any retainage held",[16,722,723],{},"That running tally prevents the most common progress-billing argument: the client losing track of what they've already paid.",[16,725,726],{},"Here's how a stage 2 invoice might read:",[38,728,729,735,776,783],{},[16,730,731,734],{},[60,732,733],{},"Invoice #2026-034","\nProject: Website redesign — Contract value $18,000",[121,736,737,746],{},[124,738,739],{},[127,740,741,744],{},[130,742,743],{},"Line item",[130,745,141],{},[143,747,748,756,764],{},[127,749,750,753],{},[148,751,752],{},"Stage 2: Design mockups approved (20% of contract)",[148,754,755],{},"$3,600.00",[127,757,758,761],{},[148,759,760],{},"Less retainage (5% of this claim)",[148,762,763],{},"–$180.00",[127,765,766,771],{},[148,767,768],{},[60,769,770],{},"Amount due this invoice",[148,772,773],{},[60,774,775],{},"$3,420.00",[16,777,778,779,782],{},"Contract value: $18,000.00\nPreviously billed (stages 0–1): $6,300.00\nThis claim: $3,600.00\n",[60,780,781],{},"Billed to date: $9,900.00 (55%)","\nRetainage held to date: $495.00\nRemaining to bill: $8,100.00",[16,784,785],{},"Payment terms: Net 14. Work on stage 3 begins on receipt.",[16,787,788],{},"Whether you deduct retainage from each claim or hold it all in a final stage is a style choice; both are fine as long as the contract and the invoice math agree. Deducting a little from each claim (as above) is cleaner because the client always sees the running retention figure.",[16,790,791,792,796],{},"Number your invoices in a consistent sequence so the project's billing history is auditable. If you juggle several clients, see ",[270,793,795],{"href":794},"\u002Finvoice-numbering-best-practices","invoice numbering best practices"," for a scheme that won't collapse under multiple projects.",[11,798,800],{"id":799},"contract-wording-that-protects-you","Contract wording that protects you",[16,802,803],{},"Progress billing lives or dies by what's written before work starts. The schedule of values belongs in the signed contract or statement of work, not buried in an email. Include clauses covering:",[16,805,806,809],{},[60,807,808],{},"The trigger definition."," Vague triggers cause disputes. \"Design phase complete\" invites argument; \"Client provides written approval of homepage and two interior page mockups via email or project tool\" does not.",[16,811,812,815,816,820,821,825],{},[60,813,814],{},"Payment terms per stage."," Short terms suit staged work. Net 7 to Net 14 is common; some freelancers use ",[270,817,819],{"href":818},"\u002Fdue-on-receipt-payment-terms","due on receipt"," for deposits and early stages. Whatever you pick, spell out your ",[270,822,824],{"href":823},"\u002Fhow-to-charge-late-fees-on-overdue-invoices","late fee"," policy too.",[16,827,828,831],{},[60,829,830],{},"A stop-work clause."," The single most valuable line in a progress-billing contract:",[38,833,834],{},[16,835,836],{},"\"Work on the subsequent stage will not commence until payment for the preceding stage has been received in full. Timelines extend automatically by any period of delayed payment.\"",[16,838,839],{},"This turns your invoice into a gate. No payment, no progress. It's the natural leverage staged billing gives you, and it beats chasing an $18,000 balance at the end.",[16,841,842,845],{},[60,843,844],{},"Scope-change handling."," When the client adds work mid-project, don't quietly absorb it into an existing stage. Issue a change order that adjusts the contract value and, if needed, adds a stage. Revised schedule of values, signed, then carry on.",[16,847,848,851],{},[60,849,850],{},"Deposit and retainage terms."," State the deposit amount, whether it's refundable, and how it's applied (usually credited against stage 0 or spread across the first stages). State the retainage percentage and its precise release condition.",[11,853,855],{"id":854},"a-worked-cash-flow-comparison","A worked cash-flow comparison",[16,857,858],{},"The point of all this is timing. Same $18,000 project, two approaches:",[16,860,861],{},[60,862,863],{},"Lump-sum, Net 30, invoiced at completion (month 4):",[54,865,866,869],{},[57,867,868],{},"Cash in: $0 until roughly day 150",[57,870,871],{},"You self-fund four months of work",[16,873,874],{},[60,875,876],{},"Progress-billed against the schedule above:",[54,878,879,882,885,888,891,894],{},[57,880,881],{},"Month 0: $3,600 deposit",[57,883,884],{},"Month 1: $2,700 (stage 1)",[57,886,887],{},"Month 2: $3,420 (stage 2, net of retainage)",[57,889,890],{},"Month 3: $4,275 (stage 3, net of retainage)",[57,892,893],{},"Month 4: $2,565 (stage 4, net of retainage)",[57,895,896],{},"Month 5: $2,340 (stage 5 + accumulated retainage $900)",[16,898,899],{},"By the end of month 2 you've collected $9,720 on a project you're only a bit over halfway through delivering. That's the difference between a healthy freelance business and one perpetually one late invoice away from trouble.",[11,901,903],{"id":902},"tax-and-record-keeping-notes","Tax and record-keeping notes",[16,905,906],{},"A few things to get right, and rules vary by jurisdiction, so confirm with your tax authority or an accountant:",[54,908,909,929,935],{},[57,910,911,914,915,917,918,920,921,924,925,928],{},[60,912,913],{},"When to recognise income and charge sales tax\u002FVAT"," usually depends on when each invoice is issued or paid, not on when the whole project finishes. If you're VAT-registered in the UK, each progress invoice is generally a tax point in its own right; see ",[270,916,326],{"href":325},". US sales tax on services varies by state, covered in ",[270,919,343],{"href":342},". Canadian GST\u002FHST has its own ",[270,922,923],{"href":354},"invoice requirements",", and Australian ",[270,926,927],{"href":359},"tax invoices"," have set fields.",[57,930,931,934],{},[60,932,933],{},"Deposits can be treated differently from progress claims"," for tax purposes in some jurisdictions. Don't assume they're the same.",[57,936,937,940,941,943],{},[60,938,939],{},"Keep every progress invoice, change order, and sign-off email"," for the whole project and beyond. Guidance on ",[270,942,383],{"href":382}," applies here.",[11,945,947],{"id":946},"when-progress-billing-isnt-worth-it","When progress billing isn't worth it",[16,949,950],{},"Skip it for anything short or small. A $900 logo delivered in a week doesn't need five invoices, take a deposit and bill the balance. Progress billing carries admin overhead: more invoices, more approvals, more tracking. The break-even point is roughly a project long enough or large enough that carrying the full cost to completion would strain your cash or your nerves.",[16,952,953],{},"It also demands a client who signs a proper contract and approves stages promptly. If sign-offs are the bottleneck, add a clause deeming a stage approved if the client doesn't respond within, say, five business days. Otherwise your carefully staged cash flow stalls on someone else's inbox.",[16,955,956],{},"Structure the stages, define the triggers in writing, and let each paid invoice unlock the next slice of work. The project funds itself, and you never carry more risk than the current stage.",{"title":430,"searchDepth":431,"depth":431,"links":958},[959,960,961,962,963,964,965,966],{"id":467,"depth":434,"text":468},{"id":490,"depth":434,"text":491},{"id":540,"depth":434,"text":541},{"id":699,"depth":434,"text":700},{"id":799,"depth":434,"text":800},{"id":854,"depth":434,"text":855},{"id":902,"depth":434,"text":903},{"id":946,"depth":434,"text":947},"2026-07-27","A practical guide to milestone and staged invoicing for freelancers and contractors, covering deposits, progress claims, retainage, and sample wording.",{},"\u002Fwhat-is-progress-billing",{"title":462,"description":968},{"loc":970},"what-is-progress-billing","1f7Wj81KqhhKD9NyCFT0w5kd8bObLSynWMtfQE4jWeY",{"id":976,"title":977,"author":6,"body":978,"category":1391,"date":1392,"dek":447,"description":1393,"extension":449,"featured":450,"meta":1394,"navigation":452,"path":354,"readingTime":1395,"seo":1396,"sitemap":1397,"stem":1398,"__hash__":1399},"content\u002Fcanada-gst-hst-invoice-requirements.md","Canadian GST\u002FHST Invoice Requirements: What to Include (+ Free Template)",{"type":8,"value":979,"toc":1381},[980,984,987,990,993,997,1008,1011,1029,1039,1047,1051,1054,1074,1077,1155,1162,1165,1176,1180,1183,1188,1199,1204,1215,1220,1238,1241,1287,1291,1294,1303,1306,1309,1313,1316,1338,1341,1345,1351,1359,1363,1378],[11,981,983],{"id":982},"the-invoice-detail-that-decides-whether-your-client-gets-their-tax-back","The invoice detail that decides whether your client gets their tax back",[16,985,986],{},"A Toronto design studio hires you, pays your $2,000 invoice plus tax, and then their bookkeeper tries to claim the HST back as an input tax credit. If your invoice is missing your nine-digit GST\u002FHST number, the Canada Revenue Agency can disallow that credit on audit. Your client eats the cost, and they remember it the next time they pick a contractor.",[16,988,989],{},"That is the practical stakes of a compliant Canadian invoice. It is not just about you charging the right tax. It is about giving the buyer the documentation the CRA requires so the money flows correctly on both sides.",[16,991,992],{},"Here is what actually has to be on the invoice, when you have to register, and how the province of your customer changes the number you charge.",[11,994,996],{"id":995},"do-you-even-have-to-charge-gsthst","Do you even have to charge GST\u002FHST?",[16,998,999,1000,1003,1004,1007],{},"You only charge GST\u002FHST once you are registered, and you generally only have to register once you cross the ",[60,1001,1002],{},"small supplier threshold",": roughly ",[60,1005,1006],{},"$30,000 in gross taxable revenue over four consecutive calendar quarters"," (or in a single quarter). That figure is long-standing, but confirm the current number with the CRA, because thresholds do change.",[16,1009,1010],{},"A few points that trip people up:",[54,1012,1013,1016,1019,1026],{},[57,1014,1015],{},"The $30,000 is worldwide taxable revenue from your business, not just Canadian sales, and it is gross, not profit.",[57,1017,1018],{},"The moment you exceed it in a single quarter, you are considered registered on the day of that sale, not at the end of the year.",[57,1020,1021,1022,1025],{},"You can ",[60,1023,1024],{},"register voluntarily"," below the threshold. Freelancers with mostly business clients often do, because it lets them claim input tax credits on their own expenses (software, laptop, home-office share) that would otherwise be sunk cost.",[57,1027,1028],{},"Zero-rated supplies (exports, basic groceries, certain medical goods) still count toward the threshold even though the rate is 0%.",[16,1030,1031,1032,1034,1035,289],{},"If you are not registered, you must ",[60,1033,25],{}," charge GST\u002FHST, and you must not show a registration number you do not have. Invoice the client for your fee alone. Once you register, you get a GST\u002FHST account number in the format ",[1036,1037,1038],"code",{},"123456789 RT0001",[16,1040,1041,1042,1046],{},"New to invoicing generally? Start with ",[270,1043,1045],{"href":1044},"\u002Fhow-to-invoice-as-a-freelancer","how to invoice as a freelancer",", then layer the tax rules below on top.",[11,1048,1050],{"id":1049},"the-rate-depends-on-your-customers-province-not-yours","The rate depends on your customer's province, not yours",[16,1052,1053],{},"This is the part that makes Canada messier than a flat national VAT. Three systems coexist:",[54,1055,1056,1062,1068],{},[57,1057,1058,1061],{},[60,1059,1060],{},"GST only (5%)"," in Alberta, and the three territories.",[57,1063,1064,1067],{},[60,1065,1066],{},"HST"," (a single blended federal-plus-provincial tax) in Ontario and Atlantic Canada.",[57,1069,1070,1073],{},[60,1071,1072],{},"GST plus a separate provincial tax"," (PST, RST, or QST) in British Columbia, Manitoba, Saskatchewan, and Quebec.",[16,1075,1076],{},"Approximate combined rates, which can change, so verify before you invoice:",[121,1078,1079,1089],{},[124,1080,1081],{},[127,1082,1083,1086],{},[130,1084,1085],{},"Province",[130,1087,1088],{},"What you charge",[143,1090,1091,1099,1107,1115,1123,1131,1139,1147],{},[127,1092,1093,1096],{},[148,1094,1095],{},"Alberta, NT, NU, YT",[148,1097,1098],{},"5% GST",[127,1100,1101,1104],{},[148,1102,1103],{},"Ontario",[148,1105,1106],{},"13% HST",[127,1108,1109,1112],{},[148,1110,1111],{},"New Brunswick, Newfoundland & Labrador, PEI",[148,1113,1114],{},"15% HST",[127,1116,1117,1120],{},[148,1118,1119],{},"Nova Scotia",[148,1121,1122],{},"14% HST (reduced in 2025 from 15%)",[127,1124,1125,1128],{},[148,1126,1127],{},"British Columbia",[148,1129,1130],{},"5% GST + 7% PST",[127,1132,1133,1136],{},[148,1134,1135],{},"Saskatchewan",[148,1137,1138],{},"5% GST + 6% PST",[127,1140,1141,1144],{},[148,1142,1143],{},"Manitoba",[148,1145,1146],{},"5% GST + 7% RST",[127,1148,1149,1152],{},[148,1150,1151],{},"Quebec",[148,1153,1154],{},"5% GST + 9.975% QST",[16,1156,1157,1158,1161],{},"Which province applies is decided by the ",[60,1159,1160],{},"place-of-supply rules",", not by where your desk is. For most services supplied to a business, the place of supply is generally the province of the customer's address that you obtain in the ordinary course of business. Sell a service to an Ontario client and you charge 13% HST even if you live in Calgary.",[16,1163,1164],{},"PST, RST, and QST are separate provincial regimes with their own registration rules. GST\u002FHST does not automatically cover them. QST in particular runs almost in parallel with GST, administered by Revenu Québec, and if you have a real presence or enough sales in those provinces you may need to register and charge their tax on top. That is a whole second layer worth confirming with an accountant if you sell across borders.",[16,1166,1167,1168,1171,1172,1175],{},"Selling to clients outside Canada is different again. Exports of services are often ",[60,1169,1170],{},"zero-rated",", meaning you charge 0% but can still recover your input tax credits. See ",[270,1173,1174],{"href":417},"how to invoice international clients"," for the mechanics.",[11,1177,1179],{"id":1178},"what-the-cra-requires-on-the-invoice","What the CRA requires on the invoice",[16,1181,1182],{},"The CRA scales its documentation requirements by the total amount of the sale. These tiers are what a registered buyer relies on to claim input tax credits, so treat the top tier as your default and you will always be safe.",[16,1184,1185],{},[60,1186,1187],{},"Sales under $30 — minimum:",[54,1189,1190,1193,1196],{},[57,1191,1192],{},"Your business or trading name",[57,1194,1195],{},"The date of the invoice",[57,1197,1198],{},"The total amount paid or payable",[16,1200,1201],{},[60,1202,1203],{},"Sales of $30 to $149.99 — add:",[54,1205,1206,1212],{},[57,1207,1208,1209],{},"Your ",[60,1210,1211],{},"GST\u002FHST registration number",[57,1213,1214],{},"The amount of GST\u002FHST charged, or a clear statement that the total includes GST\u002FHST, plus an indication of which items are taxable if the invoice mixes taxable and exempt items",[16,1216,1217],{},[60,1218,1219],{},"Sales of $150 or more — add:",[54,1221,1222,1229,1232],{},[57,1223,1224,1225,1228],{},"The ",[60,1226,1227],{},"buyer's name"," (or trading name, or the name of their authorized agent)",[57,1230,1231],{},"A description of the goods or services",[57,1233,1224,1234,1237],{},[60,1235,1236],{},"terms of the sale"," (for example, your payment terms)",[16,1239,1240],{},"Because the top tier is a superset, a good habit is to include everything on every invoice regardless of amount. A complete, defensible Canadian invoice therefore carries:",[496,1242,1243,1253,1256,1263,1266,1269,1272,1275,1278,1281,1284],{},[57,1244,1245,1246,1249,1250,1252],{},"The word ",[60,1247,1248],{},"Invoice"," and a unique invoice number (see ",[270,1251,795],{"href":794},")",[57,1254,1255],{},"Your legal or trading name, address, and contact details",[57,1257,1258,1259,1262],{},"Your GST\u002FHST registration number (",[1036,1260,1261],{},"RT0001"," format)",[57,1264,1265],{},"The invoice date, and the supply date if different",[57,1267,1268],{},"The client's name and address",[57,1270,1271],{},"A line-by-line description of what you supplied",[57,1273,1274],{},"The subtotal before tax",[57,1276,1277],{},"The GST\u002FHST shown separately, with the rate and dollar amount",[57,1279,1280],{},"Any separate PST\u002FQST if you are registered for it",[57,1282,1283],{},"The total payable",[57,1285,1286],{},"Payment terms and accepted methods",[11,1288,1290],{"id":1289},"a-worked-example","A worked example",[16,1292,1293],{},"You are a registered marketing consultant in Vancouver billing a client in Ottawa, Ontario. Place of supply is Ontario, so the rate is 13% HST.",[1295,1296,1301],"pre",{"className":1297,"code":1299,"language":1300},[1298],"language-text","INVOICE #2026-041\nDate: 25 July 2026\nFrom: Harbour Marketing (GST\u002FHST #123456789 RT0001)\nTo:   Rideau Software Inc., Ottawa, ON\n\nStrategy workshop (2 days)          $2,400.00\nCampaign copywriting                  $  900.00\n                              Subtotal $3,300.00\n                     HST (Ontario) 13% $  429.00\n                            Total due  $3,729.00\n\nTerms: Net 15. E-transfer or bank transfer.\n","text",[1036,1302,1299],{"__ignoreMap":430},[16,1304,1305],{},"The math: $3,300 × 0.13 = $429. Your client pays $3,729, records $3,300 as an expense and $429 as an input tax credit they will recover. You collected $429 on the CRA's behalf and will remit it (minus your own ITCs) on your next return.",[16,1307,1308],{},"Now change the client to Halifax, Nova Scotia. Same $3,300 of work, but HST is 14%, so tax is $462 and the total is $3,762. Same service, different province, different number. This is why place of supply has to be part of your invoicing habit, not an afterthought.",[11,1310,1312],{"id":1311},"zero-rated-vs-exempt-a-common-mix-up","Zero-rated vs exempt — a common mix-up",[16,1314,1315],{},"They both mean no tax appears as a charge, but they are not the same:",[54,1317,1318,1328],{},[57,1319,1320,1323,1324,1327],{},[60,1321,1322],{},"Zero-rated"," (0%): exports, basic groceries, prescription drugs, certain medical devices. You charge 0%, and you ",[23,1325,1326],{},"can"," still claim input tax credits on related expenses.",[57,1329,1330,1333,1334,1337],{},[60,1331,1332],{},"Exempt",": most health and dental services, financial services, residential rent, many educational courses. No tax is charged, and you ",[23,1335,1336],{},"cannot"," claim ITCs on those expenses.",[16,1339,1340],{},"If your work falls into an exempt category, you generally do not register or charge GST\u002FHST at all for that activity. If it is zero-rated, you still register (it counts toward the threshold) and still show 0% on the invoice.",[11,1342,1344],{"id":1343},"keep-the-records-to-back-it-up","Keep the records to back it up",[16,1346,1347,1348,1350],{},"The CRA can ask you to support both the tax you charged and the input tax credits you claimed. Keep copies of issued invoices and the supplier invoices behind your ITC claims. The general expectation is six years from the end of the tax year they relate to, but confirm the current period. Our guide to ",[270,1349,383],{"href":382}," covers the practical filing side.",[16,1352,1353,1354,1358],{},"If you make a billing error, do not just delete and reissue. Use a ",[270,1355,1357],{"href":1356},"\u002Fwhat-is-a-credit-note","credit note"," to reverse or adjust the original so your GST\u002FHST records stay auditable.",[11,1360,1362],{"id":1361},"how-this-compares-to-the-rest-of-the-english-speaking-world","How this compares to the rest of the English-speaking world",[16,1364,1365,1366,1369,1370,1373,1374,1377],{},"The underlying idea is the same value-added-tax logic you will see in the ",[270,1367,1368],{"href":325},"UK VAT invoice rules"," and the ",[270,1371,1372],{"href":359},"Australian tax invoice",": the registered seller collects tax, shows their registration number, and the registered buyer reclaims it. Canada's twist is the provincial patchwork of GST, HST, and separate PST\u002FQST regimes. The ",[270,1375,1376],{"href":342},"US does it differently again",", with sales tax rather than a recoverable credit system.",[16,1379,1380],{},"Rules and rates in this article vary by province and change over time. Confirm your registration obligation, the correct rate, and the current documentary thresholds with the CRA, Revenu Québec, or a qualified Canadian accountant before you rely on them.",{"title":430,"searchDepth":431,"depth":431,"links":1382},[1383,1384,1385,1386,1387,1388,1389,1390],{"id":982,"depth":434,"text":983},{"id":995,"depth":434,"text":996},{"id":1049,"depth":434,"text":1050},{"id":1178,"depth":434,"text":1179},{"id":1289,"depth":434,"text":1290},{"id":1311,"depth":434,"text":1312},{"id":1343,"depth":434,"text":1344},{"id":1361,"depth":434,"text":1362},"Tax & Compliance","2026-07-25","A Canada-specific guide to CRA invoice rules, GST\u002FHST registration, provincial rate differences, and the exact details clients need to claim input tax credits.",{},"7 min read",{"title":977,"description":1393},{"loc":354},"canada-gst-hst-invoice-requirements","EJUTEaNLRcv1M8x_He2vZ-b7bvMqXng5OGq3f66U2po",1785314446763]