Taxes and Discounts

Tax rates

Create tax rates from the invoice editor. Each has:

• Name - Like "GST," "VAT," or "Sales Tax"
• Rate - The percentage
• Inclusive or exclusive - Whether tax is already included in your prices or added on top

What's the difference?

• Exclusive (most common): Tax is added on top. A $100 item with 10% tax = $110 total.
• Inclusive: Tax is already in the price. A $100 item with 10% inclusive tax = $100 total, with $9.09 being the tax portion.

You can mix inclusive and exclusive taxes on the same invoice. Each line item can have its own tax rate.

Discounts

Add one or more discounts to an invoice:

• Percentage - A percentage off (like 10%)
• Fixed - A flat amount off (like $50)

Multiple discounts add up. The total discount can never exceed the subtotal.

How the math works

1. Each line item: quantity x unit price = line amount
2. Subtotal = all line items added up
3. Discounts subtracted from subtotal
4. Tax calculated per item
5. Total = subtotal minus discounts plus taxes