Invoicing for Builders and Carpenters in Ireland: Complete Guide (2026)

Building and carpentry jobs last days or weeks, not hours. You cannot just invoice at the end like an electrician on a half-day call-out. Stage payments, retention, material costs, RCT deductions — builders and carpenters have the most complex invoicing of any trade in Ireland.

This guide covers everything you need to know about invoicing construction work in Ireland in 2026: how to structure stage payments, handle retention, get VAT right on mixed labour-and-materials jobs, and deal with RCT. Practical advice, no jargon.

Stage Payments for Larger Jobs

A kitchen extension, a new build, a full attic conversion — these jobs run for weeks. You cannot wait until the end to get paid, and no customer expects you to. Stage payments are standard practice in Irish construction, and your invoicing needs to reflect them.

The most common structure for residential work is a 30/40/30 split: 30% deposit on mobilisation, 40% at a defined milestone (usually first fix complete), and 30% on completion. For larger commercial jobs, you might have four or five stages tied to specific milestones in the programme of works.

The key is agreeing the stages in your quote and then invoicing against each one as you hit it. Here is a typical three-stage structure:

Each stage invoice should reference the original quote number, state which stage it covers (e.g., "Stage 2 of 3"), and describe the work completed in that stage. This makes it clear to the customer what they are paying for and gives you a paper trail if there is ever a dispute.

Handling Retention

Retention is standard on commercial building work in Ireland. The client holds back a percentage of each payment — typically 5% or 10% — until the defects liability period has passed. On residential work, retention is less common but not unheard of on larger projects.

When you invoice a stage payment on a job with retention, you should invoice the full stage amount and then show the retention deduction as a separate line. For example, if Stage 2 is worth €12,000 with 5% retention:

• Stage 2 — First fix carpentry complete: €12,000
• Less 5% retention: -€600
• Amount due this invoice: €11,400

The retained amount accumulates across all stages. You then invoice the total retention as a separate invoice once the defects period ends — usually 6 or 12 months after practical completion.

VAT for Construction Work

VAT on building and carpentry work follows the same split-rate rules as other trades, but the sums involved are larger and the mix of labour and materials more complex. The two rates you need to know:

• 13.5% — applies to construction, carpentry, and building labour (the reduced rate for services)
• 23% — applies to materials, timber, blocks, fixings, insulation, and all goods supplied

Real Example: Rear Extension with Mixed VAT

Take a typical rear extension in south Dublin. The builder quotes €48,000 all-in. Here is how the VAT breaks down on one stage invoice:

• Groundwork and foundations labour — 5 days @ €300/day = €1,500 (13.5% VAT = €202.50)
• Blockwork labour — 4 days @ €280/day = €1,120 (13.5% VAT = €151.20)
• Blocks, sand, cement, steel = €2,800 (23% VAT = €644.00)
• Timber and fixings = €1,400 (23% VAT = €322.00)
• Subtotal ex-VAT: €6,820
• Total VAT: €1,319.70
• Invoice total: €8,139.70

Every line item must show the correct VAT rate. You cannot apply a blended rate across the whole invoice. If you are VAT registered, this level of detail is what Revenue expects.

What to Include on a Builder's Invoice

A builder's invoice needs more detail than a simple service call. Commercial clients in particular expect a level of documentation that ties back to the original quote or contract. Here is what should be on every invoice:

• Your business name, address, and VAT number (if VAT registered)
• Client name and address
• Site address (if different from the client's address — it usually is)
• Purchase order number (commercial clients will not pay without one)
• Invoice number (sequential, no gaps — Revenue requirement)
• Invoice date
• Quote/contract reference
• Stage reference (e.g., "Stage 2 of 3 — First Fix Complete")
• Description of work completed in this stage
• Labour breakdown — days or hours, rate per day/hour
• Materials breakdown — itemised or grouped by category
• VAT per line at the correct rate
• Retention deduction (if applicable)
• Total amount due

With VoiceInvoice, you describe the job naturally and the invoice is built with all of this structure automatically. Here is an example of what to say:

VoiceInvoice picks up the client name, stage reference, labour rate, materials, PO number, and site address from that single voice note. The PDF invoice goes to your client with the correct VAT rates applied to each line.

Multi-Day Jobs: Invoice Weekly or Per Stage?

This depends on how you are engaged. There are two common arrangements for builders and carpenters in Ireland, and each has a different invoicing rhythm:

Fixed Price (Lump Sum) — Invoice Per Stage

If you quoted a fixed price for the job, invoice at each agreed stage. The customer knows what each stage costs because it was in the quote. Your invoices reference the stages. This is cleaner, involves fewer invoices, and avoids arguments about how many hours you spent.

Day Rate (Subcontracting) — Invoice Weekly

If you are subcontracting at a day rate — say €250 or €300 a day — you typically invoice weekly or fortnightly. Each invoice states the number of days worked that week, the rate, and any materials supplied. Weekly invoicing keeps your cash flow healthy and stops unpaid amounts from building up.

RCT — What Builders Need to Know

Relevant Contracts Tax (RCT) is a withholding tax that applies to payments in the construction, forestry, and meat processing industries in Ireland. If you are a subcontractor working for a principal contractor, RCT affects every invoice you send.

Here is how it works in practice:

• The principal contractor (the builder or developer who hires you) must notify Revenue of the contract and each payment
• Revenue tells the principal contractor what deduction rate to apply to your payment
• The three rates are: 0% (for subcontractors with a good tax record), 20% (standard rate), or 35% (for unregistered or non-compliant subcontractors)
• The principal contractor deducts the RCT from your payment and sends it to Revenue on your behalf
• You can offset the RCT deducted against your income tax or corporation tax liability

From an invoicing perspective, you invoice the full amount as normal. The RCT deduction is not shown on your invoice — it is applied by the principal contractor when they pay you. However, you should keep track of all RCT deductions and the deduction authorisations (Form RCTDC) you receive.

If You Are the Principal Contractor

If you are the main contractor hiring subcontractors, you have the RCT obligations. Before making any payment to a subcontractor, you must:

1. Register the contract with Revenue through ROS (Revenue Online Service)
2. Notify Revenue of each payment before you make it
3. Apply the deduction rate Revenue specifies
4. File a return and remit the deductions to Revenue

Checking Your RCT Rate

If you are a subcontractor, you can check your current deduction rate on ROS. A 0% rate means your tax affairs are fully up to date. If you are on 20% or 35%, talk to your accountant about what needs to be resolved to bring it down. The difference between 0% and 20% on a €50,000 contract is €10,000 sitting with Revenue instead of in your account.