How it’s calculated
Each line is quantity × unit price. The discount comes off the subtotal, and tax is charged on the discounted amount.
Example: 10 × 25 = 250 and 2 × 100 = 200 give a subtotal of 450. A 10% discount (45) leaves 405, 8% tax adds 32.40, and the invoice total is 437.40.
This is general arithmetic. Tax rules (which items are taxable, rounding per line, what an invoice must show) depend on your jurisdiction.
Frequently asked questions
Is tax calculated before or after a discount?
Usually after: a discount given at the time of sale reduces the taxable amount. Some coupons and manufacturer rebates are treated differently, so check local rules.
Should I round tax on each line or on the total?
This calculator taxes the total. Rounding per line can differ by a cent or two; follow your tax authority’s or accounting software’s rule.
What must an invoice include?
Typically your business name and details, the customer, an invoice number and date, a description of each item, amounts, any tax shown separately and the total due. VAT invoices have specific required fields.
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Sources
- Contemporary Mathematics, 6.2: Discounts, Markups, and Sales Tax — OpenStax
- VAT guide (VAT Notice 700) — HM Revenue & Customs (GOV.UK)
Formulas are taken from the free public references above. Results are provided “as is” for informational and educational purposes only. See our disclaimer.
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