Set up tax rates for invoices
Name the taxes you charge, combine them where two apply, and choose a tax rate for each invoice item.
Tax rates belong to Personal or the selected team and are listed at
Invoicing settings › Tax rates (/invoicing/settings/tax-rates).
Add a tax rate
Choose Add tax rate, enter the name as it should appear on invoices, such
as HST or VAT, and its percentage. A percentage can have up to four decimal
places, such as 9.975. The first rate you add is used for new invoice items
until you choose another under New items, or choose No tax.
Click a rate's name or percentage to change it.
Combine two taxes
Some places charge two taxes on the same sale, such as GST and PST. Add one
rate, then use Add a component on it to add the second tax. An invoice item
that uses the combined rate is charged both, and the invoice shows each tax on
its own line. When two rates share a component with the same name and
percentage, such as GST in both GST and GST + PST, the invoice charges that
component once on all of the items that include it.
Turn on Compound for a component that is charged on the amount plus the rate's other components. Turn on Recoverable for tax a business can claim back when it pays it on a purchase; it is recorded for bookkeeping and does not change invoice totals.
Tax on an invoice
In the invoice editor, each item has a Tax choice: one of the team's tax rates, or No tax. The discount is taken off before tax. Tax is worked out once for each component across the whole invoice and rounded half up to the currency's smallest unit, such as a cent.
Editing a tax rate changes a draft that uses it when the draft is next saved. An issued invoice keeps the tax it was issued with.
Archive a rate
Archive takes a rate out of the list for new items. Drafts and issued invoices that use it keep it, and it can be restored from the Archived list.
The mobile app has the same Tax rates screen under Invoice settings, and each item in the mobile invoice editor has a Tax choice.
Magpie calculates the tax you configure. It does not register you to collect tax or file returns.
If invoice tax totals look wrong after saving a draft, Contact support.