Tax Settings

Tax groups let you define different tax rates and how they’re calculated. These should be set up before you create products, as you’ll assign tax groups to products and charges. Understanding the difference between inclusive and exclusive taxes is crucial for accurate pricing.

What Are Tax Groups?

Tax groups define how much tax to charge and how it’s calculated. Each group has a name, code, rate, and type (inclusive or exclusive).

Why Set Up Taxes First?

• Products need tax groups when you create them
• Charges also use tax groups for fees and surcharges
• Consistent pricing across your menu
• Accurate calculations for orders and receipts

Inclusive vs Exclusive Taxes

This is the most important concept to understand correctly.

Exclusive Tax (Most Common)

Tax is added on top of your product price.

Example:

• Product price: £10.00
• Tax rate: 20% VAT
• Tax amount: £2.00 (20% of £10.00)
• Total customer pays: £12.00

When to use:

• Most countries’ standard VAT/GST systems
• When you want customers to see the base price clearly
• Traditional retail pricing

Inclusive Tax

Tax is already included in your product price.

Example:

• Total price shown: £12.00 (includes tax)
• Tax rate: 20% VAT
• Pre-tax amount: £10.00 (what you receive)
• Tax amount: £2.00 (already collected in the £12.00)

When to use:

• Some business-to-business pricing
• When you want to show final prices only
• Specific local tax requirements

Setting Up Tax Groups

Creating a New Tax Group

1. Go to Settings → Taxes & Charges
2. Open the Tax Groups section and click “Add Tax Group”
3. Fill in the tax details (see sections below)
4. Click “Create Tax Group”

Tax Group Details

Name

A descriptive name for the tax group.

Examples:

• “Standard VAT”
• “Reduced Rate VAT”
• “Zero Rated”
• “GST Standard”
• “Sales Tax”

Code

A short code that appears on receipts and reports.

Examples:

• “VAT”
• “GST”
• “ST”
• “VAT-R” (for reduced rate)

Rate

The tax percentage.

Examples:

• 20.0% (standard UK VAT)
• 5.0% (reduced rate)
• 0.0% (zero rated)

Tax Type

Choose inclusive or exclusive based on your pricing strategy.

Default Tax Group

• On: Automatically assigned to new products
• Off: Must be manually selected
• Only one can be default at a time

Active

• On: Available for use on products and charges
• Off: Hidden but preserved for existing items

Managing Tax Groups

Viewing Your Tax Groups

The tax groups list shows:

• Name and code
• Rate and type (inclusive/exclusive)
• Status (active/inactive, default)
• Number of products using each group

Products Count

Each tax group displays how many products are currently assigned to it. This helps you understand:

• Usage tracking: See which tax rates are most commonly used
• Impact assessment: Know how many products will be affected by rate changes
• Cleanup opportunities: Identify unused tax groups for removal
• Planning: Understand your tax structure before making changes

Editing a Tax Group

1. Find the tax group in your list
2. Click the three dots (⋯) next to it
3. Select “Edit”
4. Make changes and save

Important: Changing tax rates affects existing products. Consider the impact before making changes.

Edit Warnings

When editing a tax group that’s assigned to products, you’ll see a warning indicating how many products use that tax group. This helps you:

• Assess impact: Know exactly how many products will be affected
• Plan changes: Consider if you need to update product pricing
• Verify changes: Double-check calculations after rate modifications

Deleting a Tax Group

1. Find the tax group you want to remove
2. Click the three dots (⋯) next to it
3. Select “Delete”
4. Confirm deletion

Warning: You can only delete tax groups that aren’t assigned to any products or charges.

Common Tax Setups

UK Business (VAT Registered)

Standard VAT (VAT) - 20.0% - Exclusive - Default
Reduced Rate (VAT-R) - 5.0% - Exclusive
Zero Rated (VAT-Z) - 0.0% - Exclusive

US Business (Sales Tax)

State Sales Tax (ST) - 8.25% - Exclusive - Default
Local Sales Tax (LST) - 2.0% - Exclusive
Food Tax (FOOD) - 0.0% - Exclusive

EU Business (VAT)

Standard Rate (VAT) - 21.0% - Exclusive - Default
Reduced Rate (VAT-R) - 9.0% - Exclusive
Super Reduced (VAT-SR) - 4.0% - Exclusive

Australia Business (GST)

GST Standard (GST) - 10.0% - Inclusive - Default
GST Exempt (GST-EX) - 0.0% - Exclusive

Best Practices

Plan Your Tax Structure

• Research local requirements - tax rates and rules vary by location
• Keep it simple - don’t create too many tax groups
• Use clear naming - codes should be understandable
• Set one default - most products will use your standard rate

Inclusive vs Exclusive Choice

• Exclusive for most retail food businesses
• Inclusive only if required by local regulations
• Be consistent - don’t mix inclusive and exclusive in the same menu
• Customer expectations - exclusive is usually clearer for customers

Rate Changes

• Plan ahead for tax rate changes (VAT changes, etc.)
• Update products systematically when rates change
• Keep historical records for accounting
• Test calculations after rate changes

Product Assignment

• Assign taxes when creating products - don’t leave as “no tax”
• Review tax assignments regularly
• Use reduced rates appropriately (kids’ meals, certain foods)
• Check zero-rated items carefully

Tax Calculations

How Exclusive Tax Works

Product Price: £10.00
Tax Rate: 20%
Tax Amount: £10.00 × 0.20 = £2.00
Total Price: £10.00 + £2.00 = £12.00

How Inclusive Tax Works

Total Price Shown: £12.00
Tax Rate: 20%
Pre-tax Amount: £12.00 ÷ 1.20 = £10.00
Tax Amount: £12.00 - £10.00 = £2.00

Legal Considerations

Registration Requirements

• Check if you need to register for tax collection
• Understand tax periods (monthly, quarterly)
• Keep proper records for tax authorities
• File returns on time to avoid penalties

Rate Accuracy

• Use current rates - tax rates can change
• Apply correct rates to different product types
• Document your reasoning for rate choices
• Seek professional advice for complex situations

Customer Transparency

• Show tax breakdown on receipts
• Be clear about inclusive/exclusive pricing
• Explain tax changes to customers
• Handle tax-free items appropriately

Troubleshooting

Products Without Tax

If products show “No Tax”:

• Check if they have a tax group assigned
• Verify the tax group is active
• Ensure the rate is set correctly

Incorrect Calculations

If prices seem wrong:

• Verify inclusive vs exclusive settings
• Check tax rates are current
• Confirm product prices exclude tax (for exclusive)
• Test calculations manually

Rate Changes Not Applying

If tax changes don’t appear:

• Save the tax group after editing
• Refresh product pages
• Check for cached data
• Verify the tax group is assigned to products

Need Help?

If you’re unsure about tax setup or local requirements:

• Consult a tax professional or accountant
• Check government tax websites for current rates
• Contact your local tax authority for specific advice
• Use tax software for complex calculations
• Keep detailed records of your tax decisions

Remember: tax setup affects your pricing, profitability, and legal compliance. Take the time to get it right from the start!