Basics
Discounts on an invoice: how to show them properly
Where a discount goes on an invoice, why the full price should stay visible, how tax is worked out after it, and what to do when the discount comes later.
10 Oct 2026 · 6 min read
You agree to take 10% off for a new customer. The quick way is to type the lower price on the invoice and send it. Six months later you bill the same customer the full price, and they ask why it went up. Nothing went up. The first invoice never showed that the price was reduced. A discount only does its job if the customer can see it.
Show the full price, then the discount
Put the normal price on the line, and the discount next to it or under it, as in the picture above. This does three things:
- The customer sees what the work is worth and what you took off, so the discount is noticed.
- Your next invoice at the full price is no surprise.
- Your own records show how much you gave away in a year, which is hard to know if the discounts are hidden inside lower prices.
Three kinds of discount, three places to put them
| Kind | When it is agreed | Where it goes |
|---|---|---|
| Discount at the time of sale | Agreed before the invoice is issued | On the invoice itself, on the line it applies to |
| Early payment discount | Offered for paying before a set date | As a sentence on the invoice, with both amounts and the date |
| Discount after the sale | Agreed once the invoice has already gone out | A credit note that refers to the original invoice |
The first kind is the subject of this post. For the second, see late payment fees and early payment discounts. For the third, see how to fix an invoice with a credit note.
Where the tax goes
In most countries with VAT, GST or sales tax, a discount given at the time of sale lowers the amount the tax is worked out on. In the picture above, tax is 20% of £1,080, not 20% of £1,200. So the order on the invoice is always the same: price, discount, net amount, tax, total.
A discount that depends on something later, like paying early, is often treated differently. The rules for it differ by country, so ask your accountant how to show it where you are.
On one line, or on the whole invoice
- On one line. Use this when the discount is for one item: 15% off the printing, nothing off the design. It also keeps the tax right when the lines have different tax rates.
- On every line. For a discount on the whole invoice, put the same percentage on each line. The total comes out the same, and each line still shows its own tax.
- A fixed amount. “£100 off” is easy to say. On the invoice, turn it into a percentage of the line it belongs to, so the tax follows it.
Say why, and say for how long
A discount with no reason becomes the price. A few words are enough: “first project”, “order of 50 or more”, “paid for the year in advance”. If it will not be repeated, say so when you agree it, not when the next invoice is due.
- In the quotation: “This price includes 10% off for a first project. Later work is at our usual rates.”
- For a volume discount: “5% off orders of 50 units or more. This order: 60 units.”
- When it ends: “The opening discount ran to the end of September. From October, invoices are at the usual rate.”
If you send a quotation first, show the discount there in the same way, so the invoice matches it line for line. See quotation, proforma and invoice.
Four mistakes to avoid
- Lowering the rate quietly. The customer does not see a discount, and the lower rate becomes what they expect.
- Taking the discount off after tax. The tax amount is then wrong, and so is your tax return.
- Editing an issued invoice to add a discount. An issued invoice should not change. Use a credit note for the difference.
- Accepting a discount the customer took on their own. If less arrives than you billed, find out why before you agree to it. See why a client paid less.
The short version
- Keep the full price on the invoice and show the discount beside it.
- The order is price, discount, net amount, tax, total.
- A discount at the time of sale goes on the invoice. One agreed later goes on a credit note.
- Give the reason in a few words, and say if it will not be repeated.
- Never edit an issued invoice to add a discount.