In this article, we explain how TimeChimp calculates the amounts on an invoice. This includes individual line items, discounts or surcharges, VAT, and rounding. That way, you'll know exactly how the final amounts on your invoice are determined.
Invoices created before the 14th of April have a slightly different VAT calculation where no intermediate rounding is applied. Invoices created after the 14th use the calculation described below.
Rounding
Sometimes, the amount displayed in TimeChimp may differ from your own calculation. This is because TimeChimp has chosen to calculate and round VAT on an invoice per line.
This is in line with the tax authorities' rules because, according to them, you can choose whether to calculate VAT per invoice line or on the total amount. The rounding of the VAT amount is to two digits, as you learned in high school:
If the 3rd digit after the decimal point is less than 5, you round the amount down.
If the 3rd digit after the decimal point is 5 or higher, you round the amount up.
If there are only two digits after the decimal point, there is no rounding.
This rounding method complies with the ISO 80000-1 standard.
Discounts and Surcharges
You can apply discounts or surcharges to invoices in TimeChimp.
A discount reduces the total amount (e.g., -10%)
A surcharge increases the total amount (e.g., +5%)
These discounts and surcharges are applied per line (if applicable), but they are not shown as separate lines on the invoice.
Please note that VAT is always calculated per line on the amount after the discount or surcharge is applied.
Applying all these rules, the calculation per row on an invoice looks as shown in the table below.
Description | Time | Price per hour | Row-total | 10% discount | 21% VAT |
Dev work | 00:45 | €99,50 | €74,63 (rounded from €74,625 | €67,17 ( rounded from €67,167) | €81,28 (rounded from €81,2757) |
Hopefully, this article has provided you with clarity and explanation about the VAT calculation in TimeChimp.
If you still have questions, you can always send a message to our support team via the chat in TimeChimp or by emailing support@timechimp.com.