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Your Company Info
This appears at the top of your invoice.
Bill To
Client or homeowner details.
Invoice Details
Invoice number, dates, and project reference.
Line Items
Add each item, service, or phase of work.
Notes & Payment Instructions
Optional terms, notes, and payment details.
Common Invoice Line Items by Trade
Typical items contractors include on invoices for each project type.
| Project Type | Typical Line Items |
|---|---|
| Kitchen Remodel | Demo, cabinets, countertops, plumbing, electrical, tile, paint, fixtures |
| Bathroom Remodel | Demo, plumbing rough, tile, vanity, fixtures, paint, accessories |
| Deck Build | Footings, framing, decking, railing, stairs, hardware, stain/seal |
| Roofing | Tear-off, underlayment, shingles, flashing, ridge vent, cleanup |
| Painting | Prep/masking, primer, 2 coats walls, trim paint, ceiling paint, cleanup |
| Fence Install | Post holes, posts, concrete, rails, pickets/panels, gate, hardware |
| Concrete Work | Excavation, forms, gravel base, rebar, pour, finish, cure/seal |
| Flooring | Old floor removal, subfloor prep, underlayment, flooring material, installation, transitions |
12,800+ estimates calculated this month
Last updated: 2026-02-19
Quick Answer
A contractor invoice is a professional payment request you send to clients after completing work or hitting a billing milestone. It should include your company info, client details, a unique invoice number, itemized line items with quantities and rates, payment terms, and a clear total due. Itemized invoices prevent disputes and get you paid faster.
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What you will need
- Your company name, address, phone, email, and contractor license number
- Client name and billing address
- Invoice number, date, and due date
- Itemized list of work: description, quantity, unit, and rate for each item
- Tax rate (if applicable in your state)
- Payment terms and instructions (check, Zelle, credit card, etc.)
Common payment terms by project size
| Project Size | Typical Payment Terms | When to Invoice |
|---|---|---|
| Under $2,000 | Due on Receipt | Day of completion |
| $2,000 - $10,000 | 50% deposit, 50% on completion | Deposit before start, balance on final walk |
| $10,000 - $25,000 | 33/33/34 milestone billing | At each milestone (deposit, rough-in, final) |
| $25,000+ | Monthly progress billing or milestone draws | Monthly or at major phase completions |
| Service / repair | Net 15 or due on receipt | Same day as completion |
| Commercial | Net 30 with 5-10% retainage | Monthly pay applications |
Worked examples
Example A (bathroom remodel, milestone billing):
- Invoice #1 (deposit): 50% of $18,000 contract = $9,000 due before work starts
- Invoice #2 (rough-in): Plumbing rough, tile prep, electrical = $4,500 at rough-in inspection
- Invoice #3 (final): Fixtures, tile, paint, cleanup = $4,500 at final walk-through
- Total invoiced: $18,000 (matches original contract)
Example B (fence installation, 50/50 split):
- Invoice #1 (deposit): 120 linear feet of cedar privacy fence, materials order = $2,100
- Invoice #2 (completion): Labor, posts, concrete, gate, cleanup = $2,100
- Total: $4,200 for 120 LF at $35/LF installed
Need to create the original estimate for the project? Use the contractor estimate template to build a professional bid. For tracking scope changes, the change order template keeps everything documented.
Pro tips from the field
- Invoice the same day you hit a milestone. Waiting even a few days signals to the client that payment is not urgent. Same-day invoicing gets you paid faster.
- Always itemize your work. A lump-sum invoice for "$18,000 - kitchen remodel" invites questions. Line items for demo, cabinets, countertops, plumbing, electrical, tile, and paint show exactly where the money goes.
- Include your license number. It builds trust and is required by law in many states. Homeowners verify contractor licenses, and seeing it on your invoice reinforces professionalism.
- Use sequential invoice numbers. Skipping numbers or using random IDs makes bookkeeping harder and raises red flags during audits. Keep it simple: INV-001, INV-002, INV-003.
- Put late payment terms on every invoice. "A 1.5% monthly late fee applies to invoices past due" is standard. Even if you rarely enforce it, having it in writing encourages on-time payment.
- Keep copies of everything. Every invoice, deposit receipt, and change order should be saved for at least 3 years for tax purposes. Digital copies are fine.
Common mistakes to avoid
- Lump-sum invoicing. "$15,000 for kitchen remodel" tells the client nothing. Break it down into labor, materials, and specific tasks so there is no room for dispute.
- No due date. An invoice without a due date means the client decides when to pay. Always specify: "Due: March 15, 2026" or "Net 30 from invoice date."
- Waiting too long to invoice. Invoice at milestones, not at the end. Contractors who wait until the project is finished to invoice all at once create cash flow problems and sticker shock for the client.
- Not following up. If payment is 3 days late, call or email. Most late payments are not intentional. A polite reminder within a few days recovers over 90% of late invoices.
- Forgetting sales tax. If your state requires sales tax on materials, you are responsible for collecting and remitting it. Not charging tax does not make it go away. You will owe it at tax time.
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Contractor Invoicing Guide
Everything contractors need to know about professional invoicing: payment terms, itemization, tax requirements, and best practices.
What should a contractor invoice include?
A professional contractor invoice must include your company name, address, license number, and contact info. It also needs the client name and billing address, a unique invoice number, the invoice date and due date, and itemized line items showing description, quantity, unit, rate, and amount. End with subtotal, tax (if applicable), total due, and payment terms. Include payment instructions so the client knows exactly how to pay.
Key Takeaways
- Company info with license number builds trust and meets legal requirements
- Unique invoice numbers make tracking and tax filing straightforward
- Itemized line items prevent disputes about what the client is paying for
- Payment terms and instructions reduce late payments
How do contractors typically structure payment terms?
Payment terms vary by project size and type. Small jobs (under $5,000) are usually due on receipt or Net 15. Mid-size remodels often use a deposit/completion split: 50% deposit upfront, 50% on completion. Larger projects use milestone billing: 33% deposit, 33% at rough-in, 34% at final completion. Always specify late payment penalties, typically 1.5% per month on overdue balances.
Key Takeaways
- Small jobs: due on receipt or Net 15
- Mid-size remodels: 50% deposit, 50% on completion
- Large projects: milestone billing tied to completed phases
- Include a late payment penalty (1.5%/month is standard)
What is the difference between an invoice and an estimate?
An estimate is sent before work begins and represents the projected cost. An invoice is sent after work is completed (or at milestones) and represents money owed. Estimates are not legally binding unless accepted in a contract. Invoices are requests for payment on completed work. The line items on a final invoice should match the scope from the original estimate, plus any approved change orders.
Key Takeaways
- Estimates come before work, invoices come after
- Estimates are projections, invoices are payment requests
- Final invoice line items should match the estimate plus approved changes
- Change orders should be invoiced separately or as additional line items
How should contractors handle change order billing?
Change orders should be documented and approved in writing before the extra work begins. On the invoice, list change order work as separate line items with a reference to the change order number. For example: "CO-001: Add recessed lighting (4 cans) per approved change order dated 2/15/2026." This keeps the original scope and additional work clearly separated and prevents billing disputes.
Key Takeaways
- Get written approval before starting change order work
- List change orders as separate line items on the invoice
- Reference the change order number and approval date
- Keep original scope and change work clearly separated
What are common contractor invoicing mistakes?
The most common mistakes are: not itemizing work (lump-sum invoices invite disputes), missing payment terms (no due date means the client decides when to pay), no invoice numbers (makes tracking and taxes harder), waiting too long to invoice (cash flow suffers), and not following up on late payments. Professional invoicing is a system, not a one-time event.
Key Takeaways
- Always itemize - lump sum invoices invite questions and disputes
- Include a clear due date and late payment penalty
- Use sequential invoice numbers for tracking and taxes
- Invoice promptly at milestones - do not wait until the end
- Follow up on late payments within 3 days of the due date
Do contractors need to charge sales tax on invoices?
It depends on your state. Most states tax materials but not labor. Some states tax the total contract price. A few states have no sales tax at all. As a general rule, if you are supplying materials as part of the job, you likely need to collect sales tax on the material portion. Check your state revenue department for current rules. When in doubt, consult an accountant. Getting sales tax wrong can result in back-tax penalties.
Key Takeaways
- Most states: tax materials, exempt labor
- Some states: tax the entire contract amount
- Check your state revenue department for current rules
- Consult an accountant if you are unsure - penalties for errors are steep
How to Use This Calculator
Enter your company information
Fill in your business name, address, phone, email, and contractor license number. This appears at the top of every invoice you generate.
Add client and project details
Enter the client name and billing address, plus the invoice number, date, due date, and payment terms. Reference the project name and address for job tracking.
Add itemized line items
List each service, material, or phase of work with quantity, unit, and rate. Add as many line items as you need. Set the tax rate if applicable in your state.
Copy or print your invoice
Review the invoice preview, then use Copy as Text to paste into an email or Print for a clean hardcopy. Attach to your project records for bookkeeping.
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Frequently Asked Questions
What should be on a contractor invoice?
A professional contractor invoice should include: your company name, address, license number, and contact info, the client name and billing address, a unique invoice number, invoice date and due date, itemized line items with description, quantity, unit, rate, and amount, subtotal, tax, and total due, and payment terms and instructions. Itemizing your work prevents billing disputes and makes your business look professional.
How do I number my contractor invoices?
Use a sequential numbering system that is easy to track. Common formats: INV-001, INV-002 (simple sequential), 2026-001, 2026-002 (year-prefixed), or SMITH-001 (client-prefixed for multiple projects with the same client). The key is consistency. Sequential numbers make it easy to spot missing invoices and simplify year-end bookkeeping and tax filing.
When should a contractor send an invoice?
Invoice timing depends on the project: small jobs (under $5,000) should be invoiced on completion or the same day. Mid-size projects use milestone billing, so invoice at each milestone (rough-in complete, final complete). Large projects often invoice monthly on a schedule. The rule of thumb: invoice as soon as you hit a payment milestone. Waiting weeks to send an invoice signals to the client that you are not in a hurry to get paid.
What payment terms should contractors use?
Common contractor payment terms: Due on Receipt for small jobs, Net 15 for service work and repairs, Net 30 for commercial or repeat clients, and 50/50 (deposit/completion) for mid-size remodels. For projects over $20,000, use milestone billing tied to completed phases. Always include a late payment penalty, typically 1.5% per month on overdue balances. Put the terms on every invoice and in your contract.
Do contractors charge sales tax on invoices?
It depends on your state. Most states require sales tax on materials but not on labor. Some states tax the total contract amount. Some states have no sales tax. As a general rule, if you supply materials as part of the job, you likely need to collect sales tax on those materials. Check your state revenue department or consult an accountant. Getting sales tax wrong can result in penalties and back taxes.
How do I handle deposits on a contractor invoice?
Show the deposit as a line item credit on your final invoice. For example: list all work items, show the subtotal, then add a line "Less: Deposit received (date) - ($X,XXX)" to show the remaining balance due. This creates a clear paper trail showing the total project cost, what has already been paid, and what is still owed. Keep deposit receipts on file for every project.
What is the difference between a contractor invoice and an estimate?
An estimate is a projection of what the job will cost, sent before work begins. An invoice is a request for payment on completed work. Estimates are not binding unless accepted in a written contract. Invoices represent actual charges. The line items on your final invoice should match the original estimate scope, plus any approved change orders.
How do I follow up on a late contractor invoice?
Follow up within 3 days of the due date with a polite reminder email or phone call. If not paid within 7 days past due, send a formal written notice referencing your late payment terms. After 30 days past due, consider stopping work on the current project (check your contract terms). For invoices over 60 days past due, consult a construction attorney about lien rights in your state. Consistent follow-up prevents most late payments.
Should contractors use invoicing software or templates?
For 1-5 invoices per month, a professional template (like this one) works well. For higher volume, invoicing software (QuickBooks, FreshBooks, or EstimationPro) saves time and automates reminders. The key requirement is itemized line items, sequential numbering, and consistent formatting. Whatever tool you use, make sure you keep copies of every invoice for tax records. The IRS requires you to retain records for at least 3 years.
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Built-in invoicing and Stripe payments. Collect deposits and progress payments directly from estimates.
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