Invoice Calculator
Create and calculate invoice totals with line items, tax, discounts, and shipping. Enter values for instant results with step-by-step formulas.
Reviewed by Sahil, Senior Finance & Tax Editor
Formula
Total = (Subtotal - Discount) + Tax | Tax = (Subtotal - Discount) x Tax Rate
The invoice total is calculated by summing all line items (qty x unit price) for the subtotal, subtracting any percentage discount, then adding sales tax on the discounted amount.
Worked Examples
Example 1: Freelance Web Design Invoice
Problem:3 line items: Web Design ($2,500 x 1), Logo Design ($800 x 1), Content Writing ($150 x 5 pages). 10% discount, 8% tax.
Solution:Subtotal: $2,500 + $800 + $750 = $4,050\nDiscount (10%): -$405\nAfter discount: $3,645\nTax (8%): +$291.60\nTotal: $3,936.60
Result:Subtotal: $4,050 | Discount: -$405 | Tax: $291.60 | Total: $3,936.60
Frequently Asked Questions
What should an invoice include?
A professional invoice should include: your business name and contact info, client's name and contact info, unique invoice number, invoice date and payment due date, itemized list of products/services with quantities and unit prices, subtotal, any applicable discounts, tax amount and rate, total due, payment terms (Net 30, due on receipt, etc.), and accepted payment methods. For tax compliance, include your business tax ID and the client's if required.
How do you calculate sales tax on an invoice?
Sales tax is calculated on the subtotal after discounts. Formula: Tax = (Subtotal - Discount) x Tax Rate. For example, on a $1,000 subtotal with 10% discount: discounted amount = $900, then at 8% tax: $900 x 0.08 = $72 tax, total = $972. Tax rates vary by state/locality (0-10%+ in the US). Some services may be tax-exempt. Always check your local tax regulations.
References
Reviewed by Sahil, Senior Finance & Tax Editor · Editorial policy