Formulas

This page sets out every calculation Tillage makes on prices and fees, with worked examples. Use it to check a total, explain a number to a client, or rebuild Tillage’s math in a spreadsheet.

Money is rounded to the cent at the end of each fee step. Line items are calculated at full precision and rounded for display.

Line items

Each line item is priced as quantity × rate, then raised by its variance and the quote’s profit margin.

Base cost        = Quantity × Unit price
With variance    = Base cost × (1 + Variance% ÷ 100)
Line total       = With variance × (1 + Profit margin% ÷ 100)

Or in one line:

Line total = Quantity × Unit price × (1 + Variance%) × (1 + Profit margin%)

• Variance is set per line item. It’s a buffer for uncertainty in the estimate.
• Profit margin is set once for the whole quote and applies to every line.

Profit margin here is a markup on cost: a 20% margin multiplies the price by 1.20. It isn’t margin as a share of the final price. A 20% markup gives a gross margin of about 16.7%.

Example

40 hours at $150 an hour, with 15% variance and a 20% profit margin:

Step	Calculation	Result
Base cost	40 × $150	$6,000.00
With variance	$6,000 × 1.15	$6,900.00
Line total	$6,900 × 1.20	$8,280.00

Your client sees the line total. Variance and margin are built in and never shown as separate amounts.

Profit margin is limited to 0–100%. Variance and margin are applied when you create a quote or an invoice; once an invoice is saved, editing it keeps the line totals as they are.

Quote and invoice totals

Subtotal        = Σ Line totals
After discount  = Subtotal − Discount
Tax             = After discount × Tax rate ÷ 100
Total           = After discount + Tax

The summary shows the steps as Base Subtotal (Σ base cost), With Variance, With Profit Margin (the subtotal above), then any discount and tax.

Discounts

Type	Discount amount
Percentage	Subtotal × Discount% ÷ 100
Fixed	The fixed amount, never more than the subtotal

Discounts apply after profit margin, so they come out of the final price.

Tax

Tax is a percentage of the total after discount. It’s shown only if your team has turned on the tax field, under the label from your tax settings.

Example

Two line items totaling $8,280.00 and $2,070.00, with a 10% discount and 8% tax:

Step	Calculation	Result
Subtotal	$8,280 + $2,070	$10,350.00
Discount	$10,350 × 0.10	−$1,035.00
After discount		$9,315.00
Tax	$9,315 × 0.08	$745.20
Total		$10,060.20

Platform fee

Platform fee = min(Invoice total × 1%, $50.00)

It’s calculated on the invoice total, not on any fees added at checkout.

Invoice total	Platform fee
$500	$5.00
$2,500	$25.00
$5,000	$50.00
$12,000	$50.00 (capped)

Stripe processing fee

Tillage estimates Stripe’s fee with Stripe’s standard US rates:

Card fee = Charge × 2.9% + $0.30
ACH fee  = min(Charge × 0.8%, $5.00)

Stripe charges its fee on the full amount the client pays. Your actual Stripe fee can differ, for example on international cards or outside the US.

Fee gross-up

When your client pays fees, they’re added in this order:

Subtotal = Invoice total + Platform fee (if the client pays it)
Charge   = Subtotal + Processing pass-through (if the client pays it)

Card

To leave the subtotal intact after Stripe’s fee, the pass-through solves for the fee on the final charge:

Processing pass-through = (Subtotal × 0.029 + $0.30) ÷ (1 − 0.029)

Equivalently, Charge = (Subtotal + $0.30) ÷ 0.971.

Bank transfer (ACH)

Uncapped pass-through = Subtotal × 0.008 ÷ (1 − 0.008)

If Stripe’s fee on Subtotal + Uncapped pass-through reaches the $5.00 cap, the pass-through is $5.00. Otherwise it’s the uncapped amount. In practice, the cap applies on subtotals above roughly $620.

What you receive

You receive = Charge − Platform fee − Stripe fee

When the client pays both fees, this equals the invoice total.

Example

A $2,500 invoice paid by card, client pays both fees:

Step	Calculation	Result
Platform fee	min($2,500 × 1%, $50)	$25.00
Subtotal	$2,500 + $25	$2,525.00
Processing pass-through	($2,525 × 0.029 + $0.30) ÷ 0.971	$75.72
Charge	$2,525 + $75.72	$2,600.72
Stripe fee	$2,600.72 × 0.029 + $0.30	$75.72
You receive	$2,600.72 − $25 − $75.72	$2,500.00

The same invoice paid by ACH: the uncapped pass-through would be $20.36, but Stripe’s fee would hit the $5.00 cap, so the pass-through is $5.00 and the client pays $2,530.00.

More worked examples are in Processing fees.

Recurring revenue

MRR = Σ amounts of active monthly schedules
ARR = Σ (amount × payments per year) for every active schedule

Payments per year: weekly 52, monthly 12, quarterly 4, biannual 2, annually 1. See Dashboard and analytics.

Related

• Line items and pricing
• Processing fees
• Pricing and fees