Step 1 – Line item total
Every invoice is built from line items. For each item you enter:
- Description: What you are charging for (service, product, package).
- Quantity: How many units you are billing (hours, pieces, etc.).
- Unit price: The price for a single unit.
For each line item, we calculate:
line total = quantity × unit price
Step 2 – Subtotal
Once we have all line totals, we add them together to get your invoice subtotal:
subtotal = sum of all line totals
Step 3 – Discount
If you add a discount percentage, the discount is applied to the subtotal. For example, a 10% discount on a subtotal of 200 gives a discount of 20.
discount amount = (discount % ÷ 100) × subtotal
discounted subtotal = subtotal − discount amount
Step 4 – Tax
Tax is calculated on the discounted subtotal (this is the most common and transparent billing flow).
tax amount = (tax % ÷ 100) × discounted subtotal
Step 5 – Final invoice total
Finally, we add the tax amount back to the discounted subtotal to get your final invoice total:
total = discounted subtotal + tax amount
This makes the calculation easy to audit: line items build the subtotal, discount reduces it, and tax is applied once at the end. What you see in the preview is exactly what your client will see on the invoice.