Tax on invoices

Whether tax belongs on a contractor's invoice depends on the contractor, not on you. A contractor who is registered to charge tax adds it, one who is not does not, and adding it to someone who is not registered would overpay them. So InstructorHUB is deliberately careful here, it does not silently add a tax figure it cannot be sure about.

How the total is worked out

A contractor invoice shows a subtotal, which is the sum of the lines, the actual value of the work in the period. In the current version the invoice total equals that subtotal, with tax held at zero and shown as its own explicit line rather than baked into the amount. That way the figure you see owing is exactly what the work came to, and the tax question is visible rather than hidden inside a number.

This keeps the invoice honest. You can always see what is the value of the work and what, if anything, is tax, instead of trusting that a total already has the right treatment folded in.

Where the tax treatment is applied

Because tax turns on the contractor's own registration, the right place to apply the correct treatment is your books. When you send a period's invoices to your accounting system, the export carries the line values with tax left for your bookkeeper to apply, they know each contractor's registration status and your studio's tax settings, and they map the lines accordingly. See Bookkeeping export for how a period's invoices move into Xero, MYOB, or a generic file.

Tax rules differ by country and by the contractor's circumstances, and getting them right is a question for your accountant. InstructorHUB's job is to keep the value of the work exact and the tax question clearly separated, so whoever applies the treatment has clean figures to work from.