How to make an invoice with tax and a discount, step by step

Guide · Updated 2026-11-10

What goes on an invoice, how discounts and tax lines like HST, VAT or CGST and SGST are worked out, and how to make an invoice, quote, receipt or rent receipt as a PDF.

Open the Invoice maker Free, in your browser, nothing uploaded.

An invoice is a request for payment that also works as a record for both sides. The invoice maker builds one as you type: an invoice, a quote, a receipt or a set of monthly rent receipts, with your logo, tax lines, an optional discount and the total spelled out in words. It is for freelancers, small shops, tutors, landlords and anyone who bills now and then and does not want accounting software. To check how a long total reads in words, use number to words; to see how many jobs a month cover your costs, try break-even; and to send the same letter to many customers, see mail merge.

What it is

Every invoice answers the same questions: who is billing whom, for what, how much, and by when. The sums behind it follow one order:

1. Line amount = quantity × price each.
2. Subtotal = the sum of all line amounts.
3. Discount = a percent of the subtotal, or a fixed amount. It comes off before tax.
4. Tax = rate × what is left after the discount. Lines with different rates get their own tax lines.
5. Total = subtotal − discount + all tax lines, plus an optional round-off to the nearest whole unit.

Why discount before tax? Tax is charged on what the customer really pays. The tool shares the discount across the items in proportion to their value, so each rate is applied to the right net amount.

India GST works a little differently. For a customer in your own state, each rate is split in half: CGST for the central government and SGST for the state. For a customer in another state, the full rate is shown as IGST. When you fill in your GSTIN, the heading changes to “Tax invoice”.

A quote uses the same layout, but the date box becomes “Valid until”. A receipt shows how the customer paid and a “Total paid” line.

How to use it

1. Pick Invoice, Quote, Receipt or Rent receipt at the top.
2. Fill in From (you) and To (customer). Add a PNG or JPG logo if you have one, and a tax number if you are registered.
3. Under Details, set the number, the dates and the currency.
4. Under Items, type each description, quantity and price. Press Add an item for more lines. An item can carry its own tax rate, or leave it empty to use the usual one.
5. Under Tax and discount, choose No tax, One tax or India GST, set the usual rate, and add a discount as a percent or an amount. Tick the round-off box if you bill in whole units.
6. Add payment details and terms under Notes, then press Download PDF or Print.

A worked example

A freelance writer in Canada bills a client for 6 hours of website copy at $72.50 an hour and 2 stock photo licences at $18.75 each. The client gets a 5% discount, and the writer charges HST at 13% (an example rate; check the official source for your province).

• Copywriting: 6 × $72.50 = $435.00
• Photos: 2 × $18.75 = $37.50
• Subtotal: $435.00 + $37.50 = $472.50
• Discount: 5% of $472.50 = $23.625, shown as $23.63
• After discount: $472.50 − $23.63 = $448.87
• HST 13%: 0.13 × $448.87 = $58.35
• Before rounding: $448.87 + $58.35 = $507.22

With Round the total to a whole number ticked, a round-off line of −$0.22 appears and the total is $507.00. The amount in words reads “Five Hundred Seven Dollars and 00/100”, the way a cheque is written.

For rent receipts, a tenant in India paying Rs. 18,000 a month from April 2026 to March 2027 gets 12 receipts, one per month. They print three to a page, so 12 ÷ 3 = 4 pages. Each says “Rupees Eighteen Thousand Only”. The year’s rent is 12 × Rs. 18,000 = Rs. 2,16,000. That is above Rs. 1,00,000, so an employer will usually ask for the landlord’s PAN.

Where it is used

• Freelance work. Designers, writers, tutors and developers can send a professional PDF without a monthly subscription.
• Small shops and stalls. A receipt with “Paid by” gives the customer proof of payment for returns or warranty claims.
• Trades and repairs. A quote with a “Valid until” date sets a price before the job, then the same items become the invoice.
• Renting out a room or flat. Monthly rent receipts help tenants in India claim house rent allowance at work.

Common mistakes

• Reusing an invoice number. Each invoice needs its own number so you and the customer can match payments. Count up from the last one.
• Taking the discount off after tax. That charges tax on money the customer never pays. Enter the discount in the tool and it is taken off first.
• Using the wrong tax split in India. Same-state customers get CGST and SGST; other-state customers get IGST. Tick the IGST box only for a customer in another state.
• Guessing the tax rate. Rates differ by item and by place, and they change. Check the official source before you send.
• Expecting the customer list to be saved. Only your own details can be remembered on this device. Download each PDF as your record.

Questions people ask

What is the difference between a quote and an invoice? A quote is an offer that says what a job will cost. An invoice asks for payment after you have done the work or delivered the goods.

Can one invoice have items at different tax rates? Yes. Give each item its own rate. The totals show a separate tax line for each rate.

What does the round-off line do? It moves the total to the nearest whole unit and shows the small difference, so the numbers still add up.

Can I add a logo? Yes. Choose a PNG or JPG. It is shrunk to a small size and placed above your details.