A construction invoice template gives builders, general contractors, and subcontractors a professional billing document for any construction job. This guide covers what to include, how to structure progress billing, how to invoice for labor and materials separately, and gives you a free PDF template to use right now.
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What to Include on a Construction Invoice
- Your business name and contractor license number (required in most jurisdictions)
- Your contact details — address, phone, email
- Client's name and property/job site address
- Unique invoice number — sequential, e.g. BUILD-001
- Invoice date and payment due date
- Project description — job name, location, contract reference
- Labor costs — crew hours, trades, and hourly rates
- Materials costs — itemized, with markup if applicable
- Subcontractor costs — clearly identified with your markup
- Equipment hire — if renting plant or machinery
- Progress billing reference — which stage or percentage this invoice covers
- Subtotal, tax, and total due
- Retention amount — if a retention clause applies
- Payment terms and bank details
Construction Invoice — Example Line Items
| Description | Qty / Hrs | Rate | Amount |
|---|---|---|---|
| Labour — site preparation and excavation | 24 hrs | $65/hr | $1,560.00 |
| Labour — concrete foundation pour | 16 hrs | $65/hr | $1,040.00 |
| Materials — concrete, rebar, form boards | 1 | $3,200.00 | $3,200.00 |
| Materials markup (15%) | 1 | $480.00 | $480.00 |
| Subcontractor — plumbing rough-in | 1 | $1,800.00 | $1,800.00 |
| Equipment hire — concrete mixer (3 days) | 3 | $120/day | $360.00 |
| Subtotal | $8,440.00 | ||
| Tax (10%) | $844.00 | ||
| Retention (5%) | -$461.20 | ||
| Total Due This Invoice | $8,822.80 | ||
Progress Billing for Construction Projects
Most construction projects are too large to invoice all at once. Progress billing (also called milestone billing) means invoicing in stages as the work is completed. A typical structure:
- 30% deposit invoice — at contract signing, before work starts
- 30% progress invoice — at structural completion or agreed milestone
- 30% progress invoice — at lock-up stage or second milestone
- 10% final invoice — on practical completion and handover
Each progress invoice should reference the total contract value, the percentage being claimed, and the previous amounts invoiced. Use the Notes field in InvoFree to add this context: "Progress claim 2 of 4 — 30% of $45,000 contract value. Previously invoiced: $13,500."
Retention: Many construction contracts include a retention clause — typically 5–10% of each invoice is held back until the end of the project. Show the retention deduction as a separate line item on each invoice and track the cumulative retention amount owed to you.
Labor vs Materials — How to Invoice Each
Labour Costs
List each trade or crew type separately if possible — this gives clients transparency and reduces disputes. Include the number of workers, hours worked, and hourly rate. For multi-day jobs, list the date range the invoice covers.
Materials
List materials at cost price, then add your markup as a separate line item or include it in the listed price. A 10–20% markup on materials is standard to cover procurement, storage, and wastage risk. Keep receipts in case the client questions costs.
Subcontractors
List each subcontractor as a separate line item with the trade and scope of work. As the general contractor, you typically add a 10–15% management markup on subcontractor costs. Reference the subcontract or quote number if you have one.
Construction Payment Terms
- 7 days — common for subcontractors invoicing a general contractor
- 14 days — standard for smaller residential construction
- 30 days — typical for commercial construction invoices
- Progress payments at milestones — the most common structure for large projects
In most countries, construction has specific legislation protecting subcontractor payment rights (e.g. the Construction Contracts Act in New Zealand and Australia, the Housing Grants Act in the UK, prompt payment laws in the US). Late payments on construction invoices often carry statutory interest rights.
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