The subtotal is hours times the hourly rate, or the line amounts on the form. Tax is the tax percent you enter times the taxable subtotal. The total due is the subtotal plus that tax. Nothing is filed with a tax agency.
40 hours at $100 is a $4,000 subtotal. A 13% tax field adds $520, and the invoice total is $4,520. A 0% tax field leaves the total at $4,000. The percent is whatever you type.
It does not file GST, HST, or US sales tax, and it does not know which rate a province or state charges. Retainers, deposits already paid, and late fees count only if you include them in the lines.