diff --git a/app/models/voucher.rb b/app/models/voucher.rb
index 2d74167b72..30065e8c10 100644
--- a/app/models/voucher.rb
+++ b/app/models/voucher.rb
@@ -62,6 +62,9 @@ class Voucher < ApplicationRecord
   # We limit adjustment to the maximum amount needed to cover the order, ie if the voucher
   # covers more than the order.total we only need to create an adjustment covering the order.total
   def compute_amount(order)
-    -amount.clamp(0, order.pre_discount_total)
+    return -amount.clamp(0, order.pre_discount_total) if voucher_type == FLAT_RATE
+
+    percentage = amount / 100
+    -percentage * order.pre_discount_total
   end
 end
diff --git a/app/services/voucher_adjustments_service.rb b/app/services/voucher_adjustments_service.rb
index 355058b9d6..b699851af6 100644
--- a/app/services/voucher_adjustments_service.rb
+++ b/app/services/voucher_adjustments_service.rb
@@ -15,7 +15,9 @@ class VoucherAdjustmentsService
     adjustment = @order.voucher_adjustments.first
 
     # Calculate value
-    amount = adjustment.originator.compute_amount(@order)
+    voucher = adjustment.originator
+    # TODO: see if we can remove this and do it in  handle_tax_excluded_from_price
+    amount = voucher.compute_amount(@order)
 
     # It is quite possible to have an order with both tax included in and tax excluded from price.
     # We should be able to caculate the relevant amount apply the current calculation.
@@ -24,7 +26,7 @@ class VoucherAdjustmentsService
     if @order.additional_tax_total.positive?
       handle_tax_excluded_from_price(amount)
     elsif @order.included_tax_total.positive?
-      handle_tax_included_in_price(amount)
+      handle_tax_included_in_price(amount, voucher)
     else
       adjustment.amount = amount
       adjustment.save
@@ -69,9 +71,15 @@ class VoucherAdjustmentsService
     tax_adjustment.save
   end
 
-  def handle_tax_included_in_price(amount)
-    voucher_rate = amount / @order.pre_discount_total
-    included_tax = voucher_rate * @order.included_tax_total
+  def handle_tax_included_in_price(amount, voucher)
+   if voucher.voucher_type == Voucher::FLAT_RATE
+      # Flat rate tax calulation
+      voucher_rate = amount / @order.pre_discount_total
+      included_tax = voucher_rate * @order.included_tax_total
+    else
+      # Percentage rate tax calculation
+      included_tax = -voucher.amount / 100 * @order.included_tax_total
+    end
 
     # Update Adjustment
     adjustment = @order.voucher_adjustments.first
diff --git a/spec/models/voucher_spec.rb b/spec/models/voucher_spec.rb
index 8af6daa029..67ba57dcff 100644
--- a/spec/models/voucher_spec.rb
+++ b/spec/models/voucher_spec.rb
@@ -42,12 +42,10 @@ describe Voucher do
   end
 
   describe '#compute_amount' do
-    subject { create(:voucher_flat_rate, code: 'new_code', enterprise: enterprise, amount: 10) }
-
     let(:order) { create(:order_with_totals) }
 
     context 'when order total is more than the voucher' do
-      subject { create(:voucher, code: 'new_code', enterprise: enterprise, amount: 5) }
+      subject { create(:voucher_flat_rate, code: 'new_code', enterprise: enterprise, amount: 5) }
 
       it 'uses the voucher total' do
         expect(subject.compute_amount(order).to_f).to eq(-5)
@@ -55,12 +53,22 @@ describe Voucher do
     end
 
     context 'when order total is less than the voucher' do
-      subject { create(:voucher, code: 'new_code', enterprise: enterprise, amount: 20) }
+      subject { create(:voucher_flat_rate, code: 'new_code', enterprise: enterprise, amount: 20) }
 
       it 'matches the order total' do
         expect(subject.compute_amount(order).to_f).to eq(-10)
       end
     end
+
+    context "with percentage rate voucher" do
+      subject { create(:voucher_percentage, code: 'new_code', enterprise: enterprise, amount: 10) }
+
+      it 'returns calculated anount based on the percentage' do
+        # -0.1 (10%)  * $10 = $1
+        expected_amount = -0.1 * order.total
+        expect(subject.compute_amount(order).to_f).to eq(expected_amount.to_f)
+      end
+    end
   end
 
   describe '#create_adjustment' do
diff --git a/spec/services/voucher_adjustments_service_spec.rb b/spec/services/voucher_adjustments_service_spec.rb
index dc91347b7f..4d710943c1 100644
--- a/spec/services/voucher_adjustments_service_spec.rb
+++ b/spec/services/voucher_adjustments_service_spec.rb
@@ -117,6 +117,8 @@ describe VoucherAdjustmentsService do
           order.create_tax_charge!
           order.update_shipping_fees!
           order.update_order!
+
+          VoucherAdjustmentsService.new(order).update
         end
 
         it 'includes amount without tax' do
@@ -206,7 +208,7 @@ describe VoucherAdjustmentsService do
             ship_address: create(:address),
             product_price: 110,
             tax_rate_amount: 0.10,
-            included_in_price: false,
+            included_in_price: true,
             tax_rate_name: "Tax 1"
           )
         end