1. Home
  2. Accounting
  3. Tax and Order Discount Calculations
  1. Home
  2. Configurations
  3. Tax and Order Discount Calculations

Tax and Order Discount Calculations

Order discount application for tax calculation can be done in two ways in Primaseller:

  • Applying tax after deducting order discount
  • Applying tax before deducting order discount

You can choose one of these settings by following this navigation:

  • Settings from the left panel
  • Payment, Taxes, Invoicing > Tax Configuration > Order Discount Application

If the option selected is “Before deducting order discount” then here’s how the tax and discount configuration works:

  1. Apply Item Discount
  2. Calculate Tax Per Item
  3. Find Sub-Total of all such items
  4. Deduct Order Discount to arrive at Grand Total

However, if the option is set to “After deducting order discount” then the behaviour is as follows:

  1. Take Item Selling Price
  2. Apply Item Discount
  3. Take Order Discount and distribute across items on a pro-rate basis
  4. Calculate Tax Per Item after applying Item Discount as well as distributed Order Discount
  5. Find Sub-Total of all such items and arrive at Grand Total
Choose One mode of Discounting

We strongly recommend that you choose either the Order discount or the Item discount for an Invoice and not both.

Was this article helpful?

Related Articles

Back to Top