Invoicing a client in the United States works differently from almost anywhere else, and the differences catch people out in both directions. There is no VAT. There is no national tax number that goes on an invoice. Instead there is state-level sales tax, a paperwork step most first-time freelancers have never heard of, and — if you get that step wrong — the possibility of 30% being deducted from your fee before it reaches you.
This guide covers what a US client actually needs from you, when sales tax does and does not apply, and the specific forms that decide whether you are paid in full.
This is general information, not tax or legal advice. US tax rules vary by state and depend on your own residency. Confirm anything affecting your business with the IRS or a qualified accountant.
What a US invoice needs
There is no federal law prescribing invoice fields the way section 14 UStG does in Germany or section 86/4 does in Thailand. A US invoice is a commercial document, not a tax document. What clients expect is straightforward:
- Your business name and address
- The client's business name and address
- A unique invoice number
- Invoice date and payment due date
- A clear description of goods or services
- The amount due, and the currency
- Payment instructions
Two things worth adding that clients rarely request but always appreciate: the purchase order number, if they issued one, and your payment terms written explicitly — "Net 30" rather than assuming a shared understanding. Large US companies route invoices through accounts-payable systems that match against a PO. An invoice without one can sit unpaid for weeks purely because nobody knows which budget it belongs to.
Sales tax: usually not your problem
The United States has no VAT or GST. Instead, individual states — and often counties and cities within them — levy sales tax. Rates vary by jurisdiction, and there are five states with no statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire, and Oregon.
For most people reading this, the practical answer is that you do not charge it. Sales tax generally applies when:
- you are selling tangible goods, and
- you have nexus in the buyer's state — a connection such as physical presence, employees, inventory, or sales exceeding that state's economic threshold
Most professional services are not subject to sales tax in most states. Design, consulting, writing, development, marketing — these are typically exempt. But this is genuinely state-specific: some states do tax certain digital products and some categories of service, and the rules around SaaS in particular differ sharply from one state to the next.
If you are outside the US selling services to a US client, you almost certainly have no nexus anywhere and no sales tax obligation. Do not add a tax line "to be safe" — an unexplained tax charge on an invoice from a foreign supplier is a reliable way to have it queried and delayed.
The form that decides whether you get paid in full
Before releasing your first payment, a US client will usually ask you to complete a tax form. Which form depends on who you are, and this is the part that costs people money.
If you are a US person
You complete a Form W-9. "US person" here means a US citizen, a resident alien, or a US-registered business entity. The W-9 gives the client your name, address, and taxpayer identification number — your SSN, or your EIN if you have one.
If you are paid $600 or more in a calendar year, the client must then issue you a Form 1099-NEC reporting those payments to the IRS. You will receive it early the following year. Nothing is withheld from your payments; you report the income and pay tax yourself.
Getting an EIN is free from the IRS and worth doing if you are a US sole proprietor, purely so you are not sending your Social Security number to every client.
If you are not a US person
You do not complete a W-9. Filing one when you are not a US person is incorrect and can cause problems later.
Instead you file:
- Form W-8BEN if you are a foreign individual
- Form W-8BEN-E if you are a foreign entity — a company, not a sole trader
This certifies your foreign status. It is what tells the payer that they are not dealing with a US taxpayer.
This is where the 30% comes in. US payers are required to withhold tax at 30% on certain US-source payments to foreign persons when they have no valid documentation on file. In practice, a client with no W-8BEN from you may withhold 30% of your fee and remit it to the IRS — and recovering it means filing a US tax return.
The good news is that services physically performed outside the United States are generally treated as foreign-source income and are not subject to that withholding at all. If you are a developer in Colombo or a designer in Bangkok, working from there for a US client, your income is generally not US-source. But you still need the W-8BEN on file for the payer to correctly conclude that. The form is what prevents the withholding, even when the withholding would not have been correct.
Submit it before your first invoice, not after. A W-8BEN is generally valid for the year it is signed plus three further calendar years, so this is a once-every-few-years task, not a per-invoice one.
Treaty benefits
If your country has an income tax treaty with the United States, Part II of the W-8BEN lets you claim a reduced rate of withholding on income that is US-source — royalties and licensing income, most commonly. Rates vary by country and by income type. Claiming a treaty benefit generally requires a foreign tax identification number.
Getting paid
Currency. Invoice in USD unless you have agreed otherwise. A US accounts-payable department asked to pay in an unfamiliar currency will often convert at an unfavourable rate, add a fee, or simply escalate the invoice to someone else and delay it.
Payment terms. Net 30 is the default assumption at larger US companies, and many will not negotiate it. Smaller clients and agencies frequently accept Net 14 or Net 15. Whatever you agree, put it on the invoice as an explicit due date rather than only as a term — "Due 15 September 2026" removes any argument about when the clock started.
Payment rails. Domestic US clients pay by ACH transfer or check. ACH is cheap and takes a few business days. Checks still exist in surprising numbers and are slow. For international payments, a US client sending a wire will often pass on a fee of $25–50, so agree in advance who absorbs it — otherwise it comes out of your invoice total.
Onboarding. Larger companies require you to be set up as a vendor in their system before any payment can be issued, which can take longer than the payment terms themselves. Ask about vendor onboarding at the contract stage rather than discovering it after your first invoice.
A checklist for invoicing a US client
- Correct form filed before the first invoice: W-9 if you are a US person, W-8BEN or W-8BEN-E if you are not
- EIN rather than SSN, if you are a US sole proprietor
- Purchase order number, if the client issued one
- Invoice amount in USD
- Explicit due date, not just "Net 30"
- No sales tax line unless you genuinely have nexus and the supply is taxable
- Full bank details for ACH or wire, including intermediary details for international transfers
- Vendor onboarding completed
FAQ
Do I charge sales tax to a US client?
Usually not. Sales tax applies mainly to tangible goods, and only where you have nexus in the buyer's state. Most professional services are exempt in most states, and a supplier based outside the US generally has no nexus at all. Check the specific state if you are selling digital products or SaaS, where the rules vary most.
Do I need a US tax ID to invoice a US client?
No. If you are not a US person you do not need a US taxpayer identification number simply to invoice and be paid for services performed outside the United States. You do need to give the client a completed W-8BEN. A foreign TIN is generally required only if you are claiming treaty benefits.
Why did my US client deduct 30% from my payment?
Almost certainly because they had no valid W-8BEN on file and applied the default withholding rate for payments to undocumented foreign persons. Provide the form immediately. Depending on the timing, the client may be able to correct it within the same tax year; otherwise recovering the amount means filing a US tax return.
Will I receive a 1099 as a foreign contractor?
Generally no. Form 1099-NEC reports payments to US persons. A non-US person who has filed a W-8BEN and performs the work outside the United States is normally documented on Form 1042-S if anything is reportable at all, and frequently on nothing.
What is the difference between W-8BEN and W-8BEN-E?
W-8BEN is for foreign individuals — sole traders and freelancers. W-8BEN-E is for foreign entities such as companies. They are not interchangeable, and clients regularly send the wrong one. If you invoice through a registered company, you need the -E version.
What payment terms should I use with US clients?
Net 30 is the norm at larger companies and is often non-negotiable. Net 14 or Net 15 is realistic with smaller clients and agencies. Whatever you use, state a specific due date on the invoice, and consider asking for a deposit on first engagements rather than relying on late fees you may not want to enforce.