If you're a freelancer, contractor, or sole trader in South Africa, invoicing correctly isn't optional — it's a legal requirement. A proper invoice helps you get paid on time, keeps SARS happy, and makes your business look professional. Here's everything you need to know.
Tax Invoice vs. Regular Invoice
In South Africa, SARS distinguishes between two types:
- Regular invoice — used when you are not registered for VAT. It shows the total amount due without any VAT breakdown.
- Tax invoice — required when you are VAT-registered. It must include your VAT number, the VAT amount, and the total inclusive and exclusive of VAT.
If you're not VAT-registered (turnover below R1 million/year), you issue regular invoices and must not charge VAT. If you are VAT-registered, read our VAT registration guide for what changes.
What Every Invoice Must Include
Whether you're VAT-registered or not, a professional invoice should contain:
- The word "Invoice" or "Tax Invoice" clearly displayed
- Your business name and contact details (address, email, phone)
- Client's name and details
- Invoice number — a unique, sequential number (e.g., INV-001)
- Invoice date and due date
- Description of services/goods — be specific (e.g., "Website development — 40 hours" not just "Services")
- Quantity and unit price
- Total amount due
- Payment terms (e.g., "Due within 14 days")
- Banking details for EFT payment
If VAT-registered, also include:
- Your VAT registration number
- The amount excluding VAT
- The VAT amount (at 15%)
- The total including VAT
Choosing an Invoice Numbering System
Your invoice numbers must be sequential and unique. Common formats:
- Simple: INV-001, INV-002, INV-003
- With year: 2026-001, 2026-002
- With client code: ABC-001, ABC-002 (useful if you invoice multiple clients)
The key requirement from SARS is that numbers don't repeat and follow a logical sequence.
Setting Payment Terms
Payment terms tell the client when you expect to be paid. Common options in South Africa:
- Due on receipt — payment expected immediately
- Net 7 / Net 14 / Net 30 — due within 7, 14, or 30 days
- 50% upfront, 50% on completion — common for project work
Tip: Shorter payment terms (7-14 days) significantly improve cash flow. South African research shows that invoices with "Due within 7 days" get paid on average 2 weeks faster than "Net 30" invoices.
How to Handle Late Payments
Late payments are one of the biggest challenges for freelancers. Here's what you can do:
- Send a reminder the day after the due date — keep it polite and professional
- Follow up at 7 and 14 days overdue — a phone call is often more effective than email
- Charge interest — you can include a late payment clause in your contract (typically 2% per month)
- Pause future work — don't start new work for a client who hasn't paid
Record-Keeping Requirements
SARS requires you to keep copies of all invoices for 5 years. This includes:
- Invoices you've issued
- Credit notes
- Proof of payment received
- Supporting documentation (contracts, quotes, delivery notes)
Using an online invoicing tool makes this easy — your invoices are automatically saved and searchable.
Freelancer Tax Obligations
As a freelancer or sole trader, you're responsible for:
- Provisional tax — if you earn income that's not subject to PAYE, you must register as a provisional taxpayer and pay estimated tax twice a year (August and February)
- Income tax return — file annually via SARS eFiling
- VAT returns — if VAT-registered, file bi-monthly VAT201 returns
- Expense deductions — track all business expenses to reduce your taxable income
Free Invoicing Tool for Freelancers
SmartSheets's free invoice generator lets you create professional invoices with automatic VAT calculations, sequential numbering, and PDF export. Track payments, manage clients, and keep everything organised — all from your browser.
Pair it with our expense tracker to keep a complete record of your business finances for tax season.