Question 1

Is my invoice data uploaded anywhere?

Accepted Answer

No. The form runs entirely in your browser, the draft is saved to localStorage on your own device, and the PDF is generated locally by your browser. Nothing is transmitted to a server, so there is no account to create and no data for us to lose.

Question 2

Can I use this if I am not registered for VAT, GST or sales tax?

Accepted Answer

Yes. Leave the tax rate at 0 and the tax row disappears from the PDF. Do not invent a tax line or a registration number you do not hold - charging tax you are not registered to collect is a serious problem in every jurisdiction.

Question 3

What invoice number should I start with?

Accepted Answer

Anything sequential and consistent. INV-2026-0001 is a good default: the year makes filing obvious and the four-digit counter sorts correctly up to 9,999 invoices. What matters is that you never duplicate or skip a number afterwards.

Question 4

How do I invoice a client in another currency?

Accepted Answer

Pick their currency in the dropdown before you enter amounts. The symbol updates across the form, the totals panel and the PDF. Agree the currency in writing beforehand, and remember that your bank, not this tool, sets the conversion rate you actually receive.

Question 5

Can I add my logo, and what formats work?

Accepted Answer

Upload a PNG or JPEG up to 512 KB. It is converted to a base64 data URL and embedded directly in the PDF. SVG and WebP are not supported by the PDF engine, and the size cap exists because the logo is stored alongside the draft in localStorage.

Question 6

Where is my draft saved, and how do I clear it?

Accepted Answer

In your browser under the key invoicemaker:v1:invoice-draft. Use "Clear draft" to wipe it and reset the form. The draft is per-browser and per-device, so it will not follow you to another machine.

Question 7

What is the difference between margin and markup?

Accepted Answer

Both measure the same profit. Margin divides it by revenue, markup divides it by cost. Margin is always the smaller percentage. A 100% markup equals a 50% margin, and a 25% markup equals a 20% margin.

Question 8

What is a good profit margin for a freelancer or small studio?

Accepted Answer

For time-based service work with few direct costs, 50-70% gross margin is typical and 20-35% net margin is healthy. Businesses that resell hardware, media or print run structurally lower percentages on much larger revenue, which is normal rather than a problem.

Question 9

Should my own salary count as a cost?

Accepted Answer

For gross margin, no - your time is what you are selling. For a realistic net margin, yes: put a market salary for the hours you personally worked into overheads. Otherwise the business looks profitable only because you are working for free.

Question 10

How do I price a project to hit a 40% margin?

Accepted Answer

Divide cost by 0.6. A 3,000 cost needs a 5,000 price. Multiplying by 1.4 gives 4,200, which is a 28.6% margin - the single most common pricing error in freelance quoting.

Question 11

Do Stripe or PayPal fees belong in cost or overheads?

Accepted Answer

In cost, because they scale with the invoice. At around 2.9% plus a fixed fee they can consume a tenth of a thin margin, so include them before you agree to a discount.

Question 12

Why can I not just subtract the percentage from the gross total?

Accepted Answer

Because the percentage was applied to the smaller net figure, not to the gross. Removing 20% of the gross removes 20% of a bigger number. Divide by 1.20 instead, or multiply the gross by rate / (100 + rate) to get the tax directly.

Question 13

Which rate should I use?

Accepted Answer

The rate for the place of supply, which is usually where your customer is rather than where you are. UK standard VAT is 20%, Australian GST is 10%, Indian GST is commonly 18%, and much of the Gulf uses 5%. US sales tax is set state and city by city, so use Custom.

Question 14

Do I charge tax to a client in another country?

Accepted Answer

Often not, but the rules are specific. Cross-border B2B services within the EU typically shift the liability to the buyer under the reverse charge, and exports are frequently zero-rated. Confirm the treatment for your own registration before you invoice.

Question 15

Should tax be rounded per line or per invoice?

Accepted Answer

Both are accepted in most jurisdictions, and both must be applied consistently. This tool rounds once against the base you enter, which matches invoice-level rounding. A one or two penny difference against per-line software is expected, not an error.

Question 16

Are VAT, GST and sales tax the same thing?

Accepted Answer

Mechanically VAT and GST are near-identical: collected at each stage with input tax reclaimable. US sales tax is a single-stage tax on the final sale and is generally not reclaimable by the buyer. The arithmetic in this calculator is the same for all three.

Question 17

How much late interest can I legally charge?

Accepted Answer

It depends on your jurisdiction and on what your contract says. UK statutory interest on commercial debts is 8% above the Bank of England base rate plus fixed compensation; the EU floor is eight points above the reference rate plus at least 40 euro; US limits are set per state. Check your own rules before enforcing a rate.

Question 18

Should I use simple or compound interest?

Accepted Answer

Simple interest is easier to explain, easier to defend and is what most statutory schemes use. Compound is defensible only if your signed contract says so explicitly. Over sixty days the difference on a five-figure invoice is usually a few pounds or dollars.

Question 19

Do I need a late fee clause in my contract to charge one?

Accepted Answer

A written clause makes collection dramatically easier, and in some places it is required. Several jurisdictions also grant a statutory right to interest on commercial debts even without a clause - but you will still be arguing about it, which a single sentence in the agreement avoids.

Question 20

Is a flat fee or percentage interest better?

Accepted Answer

A flat fee is more effective on small invoices, where a percentage is too small to notice. Percentage interest works better on large balances and long delays. Many contracts use both: a fixed administrative charge plus daily interest, which is exactly what this estimator models.

Question 21

Is late payment interest taxable, and does it carry sales tax?

Accepted Answer

Interest is normally taxable income to you. In most VAT and GST systems, interest charged for late payment is outside the scope of the tax because it is compensation rather than consideration for a supply - but confirm the treatment locally before adding it to a tax-bearing line.

Feature	VAT (Value Added Tax)	GST (Goods & Services Tax)	Sales Tax (US)
Collection points	Every stage (manufacturer → wholesaler → retailer → consumer)	Every stage (same as VAT)	Final sale only (retailer → consumer)
Input tax reclaim	Yes — registered businesses deduct VAT paid on purchases	Yes — registered businesses claim input tax credits	No — generally not reclaimable (resale certificates exist but differ)
Invoice requirement	Tax invoice mandatory for B2B	Tax invoice mandatory for B2B	No federal mandate; state rules vary
Cross-border B2B services	Reverse charge (buyer accounts for tax)	Reverse charge / import GST rules	Generally no tax if no nexus; complex state-by-state
Exports	Zero-rated (0% VAT, input credits retained)	Zero-rated or GST-free	Generally exempt (destination principle)
Filing frequency	Monthly/quarterly (varies by country)	Monthly/quarterly (varies by country)	Monthly/quarterly/annual (varies by state)
Registration threshold	Country-specific (e.g., UK £90k, Germany €22k)	Country-specific (e.g., AU $75k, IN ₹20L/₹40L)	State-specific economic nexus (often $100k/200 transactions)

Jurisdiction	Threshold (approx.)	System
United Kingdom	£90,000 turnover	VAT
Germany	€22,000 turnover	VAT
France	€37,500 services / €85,800 goods	VAT
Australia	$75,000 AUD turnover	GST
India	₹20L services / ₹40L goods (special category states lower)	GST
Canada	$30,000 CAD (small supplier)	GST/HST
Singapore	$1M SGD turnover	GST
UAE / Gulf	AED 375,000	VAT (5%)
US (varies by state)	Typically $100k sales or 200 transactions	Sales Tax

VAT vs GST vs Sales Tax: What Freelancers Need to Know

The mechanical difference in one table

What this means for your invoices

Common freelancer scenarios

UK freelancer → UK client

UK freelancer → EU business client

UK freelancer → US client

Australian freelancer → Australian client

Indian freelancer → Indian client

US freelancer → US client

US freelancer → non-US client

The label dropdown in the Invoice Generator

Registration thresholds (indicative, check locally)

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