Calculating Amount for Invoices

In TMetric, the calculation for invoicing is based on the time entries logged and the hourly rates set for each project, team member, work type, and also the workspace settings (rounding).

Table of Contents

• Calculating Amount
• Calculating Amount Due with Discount
• Calculating Amount Due with Taxes

Calculating Amount

The Amount($A) value is calculated by multiplying Quantity(H) and Unit Price ($R). It is calculated for each time entry separately (since in most cases there is more than one rate), and then it is summed up.

Here is the formula used for calculating the Amount in invoices:

$A = H × $R

The Quantity(H) value represents the total time worked, usually measured in decimal hours. It reflects the number of hours worked, which is then multiplied by the hourly rate to calculate the total amount billed.

The Unit Price($R) represents the hourly rate charged for a specific work type, project, or user. It is the rate applied to the quantity of time (worked hours) to calculate the total amount on the invoice.

The calculation of the Amount value depends on the Quantity value. The rounding of Quantity depends on the Time format option set in the workspace settings.

If Hours and Minutes, Clock-like, or Decimal Hours with Store data in minutes enabled are selected, the Quantity will be displayed with between 2 and 4 decimal places. If Decimal hours is selected and Store data in minutes is disabled, the Quantity will be displayed with 2 decimal places.

Let’s take a look at a real example to see how this works.

For example, a time entry is 10 minutes and the hourly rate is $50/hour. The Quantity value will be calculated in decimal hours (minutes are divided by 60) with the Store data in minutes option enabled.

• Quantity(H) = 0.1666 hours (rounded to 4 decimal places)
• Unite Price ($R) = 50$
• Amount ($A) = H × $R = 0.1666 × 50 = 8,33$

When there is more than one item type, the amount is calculated for each type, then summed and displayed as the Amount Due.

Calculating Amount Due with Discount

On the Preview Draft or Edit Invoice page, you can add a discount for your client by entering a value from 0.01 to 100 in the Discount field.

The discount value for each item type is calculated by multiplying the amount of that item type by the discount percentage (Discount % ÷ 100).

For example, if the discount is 10% and the amount for the item type is 15.00, the discount value will be 1.50. 

Then, the Amount Due will be calculated as the difference between the Subtotal (the total of all Amounts for the item types) and the Discount. 

In our case, we have one item type with an amount of $15.00 and a discount of $1.50. So:

Amount Due = 15.00 - 1.50 = 13.50

Calculating Amount Due with Taxes

On the Preview Draft or Edit Invoice page, you can add one tax or two, if needed. Just enter a value from 0.00 to 100 in the corresponding tax field.

The tax value for each item type is calculated by multiplying the amount of that item type by the tax percentage (Tax % ÷ 100).

For example, if a tax is 5% and the amount for the item type is 15.00, the tax value will be 0.75.

Then, the Amount Due will be calculated as the sum of the Subtotal (the total of all Amounts for the item types) and the Tax. 

In our case, we have one item type with an amount of $15.00 and a tax of $0.75. So:

Amount Due = 15.00 + 0.75 = 15.75

If you add both a discount and taxes to the invoice, the Amount Due will be calculated by taking the Subtotal, subtracting any Discount, and then adding the Tax and second Tax (if there is one).

Example:

• Subtotal: $500

• Discount: $50

• Tax: $45

• Tax 2: $10

Amount Due = 500 − 50 + 45 + 10 = 505