I'm trying to understand how Magento is calculating the total amount for an order when using a coupon discount.

The item purchased is $554.26 without taxes. The tax is 8.25%. The coupon discounts 10% from the order.

The settings are Apply Customer Tax after discount, and Apply Discount On Prices excluding tax.

Magento order Magento settings

Shouldn't the total be calculated in this manner: 554.26(subtotal) - 55.42(discount) = $498.84 $498.98 + 8.25% ($41.17) = $540.15

Maybe I still don't understand exactly how the Apply Customer Tax and Apply Discount On Prices actually work.

Any idea how Magento is doing the calculations ?


PD: I'm using a vanilla install of Magento

1 Answer 1


Magento is calculating:

Tax: 554.26 × 0.0825 = 45.72645.

Subtotal + Tax: 554.26 + 45.72645 = 599.98645.

Total - Discount: 599.98645 - 54.42 = 544.56645

I think if you tweak some settings in Admin -> System -> Configuration -> Sales -> Tax -> Calculation Settings and Admin -> System -> Configuration -> Sales -> Sales -> Checkout Totals Sort Order then you can get it to the computation that you're expecting but the way I have it broken out above is how it's computing based on your current settings.

  • Shouldn't it be applying the tax after the discount and not before according to the settings (Apply customer tax after discount)? Feb 16, 2015 at 15:36

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