To add VAT, GST or sales tax to an invoice, set the tax rate, and the invoice shows a subtotal, a separate tax line with the rate and amount, then the total including tax. You only do this if you are registered for the tax where you work. In the invoice generator, enter the rate and the tax line and total update for you.
Tax rules differ a great deal from one country to the next, so the guidance here is general. Always check your local rules for the specifics that apply to you.
First, do you charge tax at all?
Most countries only require you to charge VAT, GST or sales tax once you are registered, and registration is usually triggered by passing a turnover threshold. Below that threshold you typically do not charge tax and you leave the tax line off the invoice entirely.
So the first question is simply whether you are registered. If you are not, set the rate to zero and the tax line disappears. If you are, read on.
Show the tax as its own line
A clear tax invoice separates the tax from the goods so everyone can see how the total is built:
- Subtotal: the total of your line items before tax.
- Tax line: the rate (for example 20% VAT or 10% GST) and the resulting amount.
- Total: the subtotal plus the tax, which is what the client pays.
Keeping the tax on its own line matters because business customers reclaim it and need to see it stated. The generator handles this layout for you once you enter a rate.
Add your tax registration number
If you are registered, your invoice usually has to carry your tax registration number (for example a VAT number). Put it with your business details near the top. Many countries also expect a registered invoice to be labelled clearly and to show the tax rate against each applicable line. Check what your local rules require.
Inclusive or exclusive pricing
Decide whether your listed prices already include tax or have it added on top. Billing other businesses, prices are commonly shown before tax with tax added separately. Billing consumers, prices are often shown with tax already included. Neither is wrong; just be consistent and make it obvious on the invoice so the final total is never in doubt.
Different rates and zero-rated items
Some sales sit at a reduced rate, a zero rate, or are exempt, and the rules for which is which are country-specific. If your work spans more than one rate, itemise it so each line carries the correct tax treatment. When in doubt, an accountant familiar with your country will save you trouble later.
To produce a clean tax invoice now, open the invoice generator, set your rate, and download the PDF. It is free, with no watermark, and nothing you enter leaves your browser.
