How to Write a Contractor Invoice (With Example and Checklist)

A contractor invoice should show your business name and contact details, your license number where your state requires it, the client’s details and job address, a unique invoice number and date, an itemized list of labor and materials, any deposit already paid, sales tax if it applies, the balance due, the due date, and how to pay. Get those right and you remove most of the reasons clients give for paying late.

Below is a step-by-step guide to writing a contractor invoice, with a worked example and a checklist. If you use the Contractor Business Spreadsheet US Edition, its Invoice tab builds most of this from a single Job ID.

What to include on a contractor invoice

There is no single federal invoice format in the US, but the IRS lists invoices among the documents that support your gross receipts. Your state may also have rules for contractors. A complete invoice includes:

1. The word “Invoice” and a unique invoice number. Use a simple sequence (1001, 1002, 1003) and never reuse a number.
2. Your business details: legal name, any DBA, address, phone and email.
3. Your contractor license number, if your state or city licenses your trade. Many states require it on contracts, bids or advertising, and putting it on the invoice too builds trust. Check your state licensing board.
4. The client’s name and billing address, plus the job site address if it’s different.
5. Invoice date and the dates the work was done.
6. Your estimate or contract reference, so the invoice ties back to what the client approved.
7. Itemized labor: hours or days and the rate, or a fixed price per task.
8. Itemized materials, with any markup built into the price.
9. Change orders, each on its own line with its own reference.
10. Subtotal, sales tax (if it applies), deposits or progress payments received, and the balance due.
11. Payment terms and an actual due date.
12. Payment methods: check payee, ACH details or a card payment link.

Do I put my EIN on the invoice?

You don’t have to, but some commercial clients ask for it. Most business clients will instead ask you for a Form W-9 before they pay you, so they can report your payments. If you’re a sole proprietor without an EIN, consider getting one free from the IRS so you aren’t handing your Social Security number to every client.

Sales tax on contractor invoices

Sales tax on construction work varies widely by state. In some states the contractor pays sales tax when buying materials and doesn’t charge it to the customer. In others, certain repair or installation labor is taxable, and some states treat materials and labor differently depending on whether the job is a capital improvement. There is no one rule, so check your state department of revenue’s guidance for contractors before you add a sales tax line.

If you do charge sales tax, show it as a separate line with the rate, and list labor and materials separately so it’s clear what the tax applies to.

Worked example: a deck repair invoice

Here’s how the numbers look for a fixed-price deck repair with one change order, in a state where (for this example) a 6% sales tax applies to materials only.

Because labor, materials and the change order are split out, the client can see exactly where the money went, and the sales tax calculation can be checked line by line.

Payment terms that get you paid

• Agree terms before the job starts. Put deposit, progress payments and final payment terms in the contract, then repeat them on the invoice.
• Write a date, not just “Net 30”. “Due by November 20, 2026” is harder to ignore.
• Use progress billing on bigger jobs. For example, 30% deposit, 40% at rough-in, 30% on completion. Invoice each stage with its own number and show what’s been paid to date.
• Late fees only if agreed. State laws limit late fees and interest, and you generally can’t add a fee the client never agreed to. Put any late fee in the contract and on the invoice.
• Know your lien rights. Most states give contractors mechanic’s lien rights, but many require preliminary notices or strict deadlines. Your state’s rules decide what you must send and when, so check them before a job starts, not after a client stops paying.

Contractor invoice checklist

1. Invoice number is next in sequence and unused.
2. Your business name, contact details and license number (if required) are shown.
3. Client name, billing address and job site address are correct.
4. Work dates and estimate or contract reference are included.
5. Labor, materials and change orders are on separate lines.
6. Sales tax is applied only if your state requires it, at the right rate.
7. Deposits and progress payments are deducted.
8. Due date and payment methods are clear.
9. A copy is saved. The IRS generally expects you to keep records for at least 3 years, and longer in some cases.

Every invoice you send is income you’ll owe tax on. Our guide to estimated quarterly taxes for contractors shows how much of each payment to set aside.

An easy way to keep on top of it

The Contractor Business Spreadsheet US Edition is built for US contractors and works in Excel and Google Sheets, with a one-time price and no subscription. It turns each job into an invoice and shows you who still owes you money.

• Invoice tab that fills in from a single Job ID or customer, with a sales tax line and space for your contractor license # / EIN, ready to save as a PDF.
• Invoice Extras for extra lines, sales tax or a deposit already paid, without changing the invoice layout.
• Invoice Register that saves every invoice, so typing its number reloads it exactly as it was.
• Jobs tab with automatic balance due and payment status (Paid, Outstanding, Overdue), plus payment terms set once in Settings.

See the Contractor Business Spreadsheet US Edition →

Contractor invoice FAQs

When should a contractor send an invoice?

As soon as the work, or the agreed stage of work, is complete. Waiting weeks to invoice pushes your payment back by the same amount. For long jobs, invoice at each milestone in your contract.

What’s the difference between an estimate and an invoice?

An estimate tells the client what the work is expected to cost before it starts. An invoice asks for payment for work done. Reference the estimate number on the invoice so the two match.

Can I charge a late fee on an unpaid invoice?

Usually only if the client agreed to it in your contract or terms before the work, and within your state’s legal limits. Show the late fee terms on every invoice.

Do I need to charge sales tax on labor?

It depends on your state and the type of work. Some states tax certain repair or installation labor, many don’t tax labor at all. Check your state department of revenue’s guidance for contractors.

This guide is general information, not legal or tax advice. Invoice, sales tax, licensing and lien rules vary by state, so check with your state agencies or a tax professional for your situation.