Invoice Total
The total on an invoice after a discount and a tax, with tax charged on the discounted amount.
Recent
Formula
How the calculation works
Order is the whole point. The discount comes off the subtotal first and the tax is charged on what is left, because the tax authority wants its share of the amount actually invoiced, not of the list price.
Doing it the other way round -- tax first, discount after -- gives a different and wrong total. On 1,000 with 20% tax and 10% off, the right answer is 1,080 and the reversed one is 1,100.
Common mistakes
- Adding the tax to the full subtotal and then deducting the discount. It overstates the total by the tax on the discounted amount.
- Treating the discount and the tax as two percentages to combine. They act on different bases, so they cannot simply be added or netted off.
When to use it
- Use it to check an invoice from a supplier, or to work out what to charge before you raise one of your own.
- It is also the quick way to see the true cost of a discount when tax sits on top, which is why a 10% discount rarely cuts 10% from what you pay.
Worked example
On 1,000 with 10% off and 20% tax: 100 off, 900 net, 180 tax, total 1,080.
Common questions
What if tax is applied first?
The total comes out higher, because tax should apply to the amount actually charged. Taxing 1,000 first gives 1,200, then 10% off gives 1,080 -- not the same figure.
What if the discount is over 100%?
The calculator stops. A discount above 100% means a negative price, which no invoice can carry, so it is reported as an error.