Putting together an invoice means combining a subtotal from your line items with any discount and the applicable tax rate. This calculator handles that final math step so the total you send a client is accurate.
The formula
discounted subtotal = subtotal × (1 − discount % ÷ 100)
tax amount = discounted subtotal × (tax % ÷ 100)
invoice total = discounted subtotal + tax amount
For an $850 subtotal with no discount and 7.5% tax: tax = $850 × 0.075 = $63.75, and total = $850 + $63.75 = $913.75.
Worked examples
| Subtotal | Discount | Tax | Total |
|---|---|---|---|
| $1,200 | 10% | 8% | $1,166.40 |
| $500 | 0% | 0% | $500.00 |
| $2,000 | 5% | 6% | $2,014.00 |
Common mistakes
- Applying tax before the discount. Discounts are almost always applied first, with tax calculated on the reduced amount, not the original subtotal.
- Forgetting tax exemptions. Some services or business-to-business transactions may be tax-exempt in certain jurisdictions — confirm your local rules before assuming a standard rate applies.
Tips
- Keep a clear breakdown (subtotal, discount, tax, total) on the invoice itself, not just the final number, so clients can verify each step.
Frequently asked questions
How do I calculate an invoice total?
Apply any discount to the subtotal first, then calculate tax on the discounted amount, and add the tax to get the final total.
Should tax be applied before or after a discount?
After. Tax is almost always calculated on the discounted subtotal, not the original pre-discount amount.
Does this calculator handle multiple tax rates?
No, it applies a single combined tax rate. If you need to apply separate rates (e.g., state and local), add them together into one combined percentage first.