Invoice Total Calculator
Invoice total from hours, rate, tax, and a discount.
Input sheet
DIY at your own risk. Calcora's calculators and guides are general estimates and information only — not professional, engineering, legal, or safety advice. Always verify local building codes and permit requirements, and hire a licensed pro for electrical, gas, plumbing, structural, or any work you're not fully comfortable doing yourself.
Getting an invoice total right means applying the discount and the tax in the correct order — discount first, then tax on the reduced amount. Reverse them and you either overcharge the client or undercollect the tax.
How it works
Hours × rate is the subtotal; apply the discount, then add tax on the discounted amount.
The subtotal is simply hours times rate. The discount comes off that subtotal, and tax is then charged on the discounted figure, because a client should not pay tax on a discount they never paid. Doing it the other way around inflates the total.
This ordering matches how most accounting systems and tax rules work: the taxable base is the net price after any reduction, so the customer is taxed only on what they are actually billed.
Subtotal = Hours × Rate; After discount = Subtotal × (1 − Discount); Total = After discount × (1 + Tax).
Worked examples
20 hours at $75/hr, no discount, no tax. → $1,500.00 invoice total.
20 × $75 = $1,500, with nothing added or removed.
20 hours at $75/hr with a 10% discount and 8% tax. → $1,458.00 total ($1,500 subtotal, $1,350 after discount, $108 tax).
$1,500 × 0.90 = $1,350 after the discount, then $1,350 × 1.08 = $1,458, with tax charged only on the discounted amount.
Tips & gotchas
- Always apply percentage discounts before tax — taxing first and discounting after slightly overcharges the client.
- Confirm your jurisdiction's rule on whether discounts reduce the taxable base; most do, but a few special cases differ.
- Round only the final total, not each intermediate step, to avoid penny drift on large invoices.
- Spell out the subtotal, discount, and tax as separate lines so the client can verify each component.
FAQ
Should I apply tax or the discount first?
Apply the discount first, then tax the reduced amount. The customer should not be taxed on money they were never charged.
Is the discount taken on the subtotal or the total?
On the subtotal (hours × rate), before tax is added. The discount lowers the taxable base, which then has tax applied.
What if I set tax to zero?
The total simply equals the subtotal minus any discount. Use a zero tax rate for tax-exempt work or jurisdictions where you do not collect tax.
Related calculators
Margin vs Markup Calculator · Profit Margin Calculator · Stacked Discount Calculator · VAT Calculator · Freelance Hourly Rate Calculator