In Bloom, discounts and taxes are calculated in a specific order to make sure your invoice totals are accurate and easy to understand.
How Discounts Are Applied
When you apply a discount to an invoice, it’s distributed proportionally across all line items based on their value. Let’s look at an example:
Say you have two line items:
Line Item 1: $100
Line Item 2: $200
If you apply a 10% discount, that discount is applied evenly to both line items:
Line Item 1: $90
Line Item 2: $180
Each item had 10% deducted from it.
If instead you apply a flat $10 discount, Bloom will distribute that discount across the two line items proportionally:
Line Item 1 is 1/3 of the total ($100 out of $300)
Line Item 2 is 2/3 of the total ($200 out of $300)
So:
Line Item 1 gets 1/3 of the $10 discount = $3.33
Line Item 2 gets 2/3 of the $10 discount = $6.66
Your new line item totals would be:
Line Item 1: $96.67
Line Item 2: $193.34
When Taxes Are Applied
Taxes are calculated after the discount has been applied. So continuing the example above:
If each line item has a 5% tax,
The tax is applied to the discounted prices: $90 and $180 (not $100 and $200).
This gives:
$90 + 5% tax = $94.50
$180 + 5% tax = $189.00
Total invoice: $283.50
That breaks down to:
Subtotal ($300) – 10% discount ($30) + 5% tax ($13.50) = $283.50
Invoices with Taxable and Non-Taxable Items
If your invoice includes both taxable and non-taxable line items, discounts are still applied proportionally to all items first—before tax is calculated.
This can create a situation where it seems like the discount or tax is being applied incorrectly, especially if you're expecting the discount to reduce only the taxed amount. In Bloom, however, the system splits the discount across all line items, and only the taxable portion of those discounted items is taxed.
Here’s what that looks like:
You have one taxable item ($200) and one non-taxable item ($100)
You apply a 10% discount → now they’re $180 (taxable) and $90 (non-taxable)
Tax is only applied to the $180 item, not the $90 item
So, even though the discount is applied evenly across both items, tax is only applied to the discounted taxable amount.
If you have questions about how this works for your specific invoice, feel free to reach out to our support team!