In one line
The total of the lines before tax, discounts or payments already made.
Also called the net total or the pre-tax total.
What it means in practice
The subtotal is the anchor for everything below it. Tax is calculated on it, a discount comes off it, and any deposit already paid is subtracted after it.
Show the steps rather than one figure. A client who can follow subtotal, discount, tax and balance due has nothing left to query.
Example. Lines $1,800, discount $100, tax 8.25% on $1,700, total $1,840.25.
Where it shows up on the paperwork
Directly under the line items, above discount, tax and the total. Everything below it is calculated from it, which is why it appears on its own line rather than being folded into the total.
What goes wrong
- Showing only a total, so a client who queries the tax has to rebuild the invoice to check it.
- Applying the discount after tax, which produces a different number from applying it before.
- Rounding at each line and again at the subtotal, so the arithmetic on the page does not add up.
The tools for this
Related terms
- Line itemOne row on a document: what it is, how many, at what rate, and what that comes to.
- DiscountAn amount taken off a price, shown as a percentage or a figure on the line or the total.
- Balance dueThe amount still owed on a job after any deposit or part payment.
Common questions
Does the subtotal include tax?
No. The subtotal is the lines before tax and usually before discount. Tax is then calculated on the discounted subtotal.
Should the discount come off before or after tax?
Before, in almost every case: the client pays tax on what they are actually charged. Show the order on the invoice so it can be checked.