Using the Invoice Calculator
This utility helps freelancers, contractors, and business owners quickly calculate the final gross amount to bill their clients. It allows you to enter a base price and instantly apply discounts and applicable taxes (like GST).
How It Works
The standard order of operations when calculating an invoice is:
- Apply the Discount to the Base Price. This gives you the Subtotal.
- Apply the Tax Rate (e.g., 18% GST) to the Subtotal.
- Add the Tax amount to the Subtotal to get the Final Gross Invoice Amount.
Discount before Tax
Legally, indirect taxes like GST are calculated on the transaction value after the discount is applied, provided the discount is recorded on the face of the invoice. Never calculate tax on the original price if you are giving an upfront discount.