Tax Calculations on Orders

Tax calculations on orders, back-office reports are calculated based on the “tax calculation type” that you select in the “invoice” tab on the settings page. Please refer to the Invoice section on how to select the tax calculation type.

Tax Calculation When Selected Type is "All of the Freight and Material."

Suppose you have added the following line items (as shown in the image below) on the order and you entered the sales tax rate as 3.5 on the order,

In this case,

Material total = 124, Freight total = 127.50

Sales tax rate =3.5

So tax will be calculated as,

Sales tax=   sales tax rate * (total of material +total of freight)  = 3.5 * (124+127.50)   = 8.8025

                                                    100                                                                     100

The same value is shown in the sales tax field but up to 2 decimal places only (after rounding off the final sales tax value). Then the total is calculated using this sales tax, and the total of material and freight.

When you print the back-office report of the order, the same calculation technique as explained above is used for calculating the sales tax value.

Tax Calculation When Selected Type is “Based on Line Totals with Any Line with Materials on the Line."

Suppose you have added the following line items (as shown in the image below) on the order and you entered the sales tax rate as 3.5 on the order,​

In this case, only lines 1 and 2 have materials on the line so only these 2 will be considered for calculation of tax. Line 3 does not have the material and is freight only so it will not be considered.

Sales tax rate =3.5 So tax will be calculated as,

Sales tax=   sales tax rate * (line total of any line with materials on the line) 

                                                                       100

                  =   Sales tax rate * (line totals of line 1 (material + freight) and line 2 (material +freight)     

                                                                                    100

                  =   3.5 * (176.5)        = 6.1775

                             100

The same value is shown in the sales tax field but up to two decimal places only (after rounding off the final sales tax value). Then the total is calculated using this sales tax and the total of material and freight.

Sales Tax

When you print the back-office report of the order, the same calculation technique as explained above is used for calculating the sales tax value.

Tax Calculation When Selected Type is “Based on a Total of Material Charges."

Suppose you have added the following line items (as shown in the image below) on the order and you entered the sales tax rate as 3.5 on the order,

In this case, the total material charges of all line items are considered for the calculation of tax.

Material total of all line items = 124

Sales tax rate =3.5

So tax will be calculated as,

Sales tax=   sales tax rate * (total of material charges of all line items)  =   3.5 * (124)  

                                                             100                                                                  100

= 4.34

The same value is shown in the sales tax field but up to 2 decimal places only (after rounding off the final sales tax value). Then the total is calculated using this sales tax and the total of material and freight.

Sales Tax Material and Freight

When you print the back-office report of the order, the same calculation technique as explained above is used for calculating the sales tax value.

Tax Calculation When Selected Type is “No Tax Calculation."

Suppose you have added the following line items (as shown in the image below) on the order

In this case, you will not be allowed to enter the sales tax rate, but you can directly add the sales tax (e.g. 200) to the order. When this tax calculation type is selected, the sales tax rate field is disabled.

When you print the back-office report of the order, the same sales tax value which was entered on the order page is used for calculating the total value.

Sales Tax Added Directly

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