Definition

This article is about the calculation of direct Skill Damage like it's shown in the tooltip when you hover over the skill's icon. It's a little simplified presentation, to make it less complex for the reader.
Damage-over-time (DoTs) and Healing/Healing-over-time (HoTs) are not covered here, because they are effects and these effects are calculated differently (but with similarities).
Multipliers are values which are used to boost an initial value. They are usually initialized with 1 and percentages are added in 1/100s, so for example, +5% results in 1 + 5/100 = 1.05

Attack Damage Formula

Using a skill launches one or more attacks on the target which causes damage. Each attack uses a specific damage Implement Type: melee, ranged or tactical.

Attack Damage = (Implement Damage + Additional DPS * Action Duration) * Contribution Multiplier * Damage Modifier * Mastery Multiplier * Damage Qualifier

Also, another type of multiplier has been added in Update 35 which shows like x1.2 in effect tooltips like with Audacity (Outgoing Damage).

Damage Qualifier

Damage Qualifier is a multiplier which get higher with additions from traits and effects. This multiplier is dependent on Implement Type (Melee, Ranged, Tactical), so you have a multiplier for each, from which one is selected.
Mostly you can identify additions to the multiplier by the use of the Implement Type in the descriptions, like: +...% Melee Damage, +...% Ranged Damage, +...% Tactical Damage. An example is the trait Of All Trades. It's also possible that descriptions have been combined in a single +...% Damage, but devs said that they wanted to remove those for more clarity.

Mastery Multiplier

This is a multiplier which gets the rating percentage which is calculated from mastery. This multiplier is dependent on Implement Type (Melee, Ranged, Tactical) as follows:

Physical Melee: Physical Mastery rating (basically Melee Offence Rating) derived percentage
Physical Ranged: Physical Mastery rating (basically Ranged Offence Rating) derived percentage
Tactical Offence: Tactical Mastery rating (basically Tactical Offence Rating) derived percentage

See for calculation Rating to percentage formula.
This multiplier was created new in Update 35. The damage percentage from mastery was added to Damage Qualifier before the update.

Damage Modifier

Damage Modifier is a multiplier which in general gets referred to as "Skill Mods". In contrary to this description, the definition of which percentages are added is specific to an attack. The list of possible "Mods" is usually limited to a number of 5 or 6 percentages, but can also be less.
The percentages for this multiplier can come from traits, effects and Legendary Items (Word of Power Traceries & Word of Mastery Traceries). Examples of percentages are: Single Target Attack Damage as in Item:Single Target Attack Damage or Dissonance Cry and Call Damage in Discordant Cries.
Note that the attack's Mod list is important, because if a certain percentage like Single Target Attack Damage is for any reason not included in the list then it won't be added to the multiplier. This can give possibilities for bugs - you might not get what you would expect from a tracery.

Contribution Multiplier

This is what primarily makes a skill small or large. It's a fixed value which is set in each attack definition. For example, Improved Swift Bow has 3 attacks. The multipliers are #1: 1.93 #2: 1.85 #3: 1.4, which is not really grant for these values. Low Cut has a multiplier value of 7.27, which is not unusual.

Implement Damage

Implement Damage is one of the two basic damage contributions. It's based on Implement Type as it's name suggests. This is the damage which is ultimately derived from the DPS number on your equipment (but Minimum and Maximum are used for the damage calculations) like:

Melee: melee weapons (single or two-handed) - DPS, Minimum and Maximum Damage as shown. The DPS number is defined in the weapon by an item level+quality driven progression. Minimum and Maximum are calculated from this, with a variance of 0.4, resulting in: Minimum = 0.75 * DPS, Maximum = 1.25 * DPS
Ranged: ranged weapons (bows/crossbows) - DPS, Minimum and Maximum Damage as shown. The DPS number is defined in the weapon by an item level+quality driven progression. Minimum and Maximum are calculated from this, with a variance of 0.45, resulting in: Minimum = (22/31) * DPS, Maximum = (40/31) * DPS
Tactical: class items/weapons - TDR as shown gives the following: Maximum = TDR + Character Level(with a maximum of 50) * 1, Minimum = (1-0.3) * Maximum (so with variance 0.3 downward)

Additional Damage

This is a damage contribution which is derived from an in the attack specified additional DPS number (which uses a character level driven progression), multiplied by a kind of set time related to the duration of the attack. This is based on the principle formula: Damage = DPS * Time.
This time (Action Duration) is not the real time that it would take for completing the attack. It's more of a loosely based concept. If the skill has an induction time then this time is added to the set duration (as it would be without induction time reductions).

Direct Skill Damage Calculation

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