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Set up and manage taxes

Let Fresha automatically calculate the tax contribution for each sale raised, based on your settings. Learn how to set the tax defaults for your entire business or specific locations. 

This guide covers: 

Getting started

If you're registered to pay tax with your local authority, this can be automatically calculated, applied and collected for your products and services. Tax rates can be set as a default or applied to locations individually and in bulk. Before setting up your taxes, we recommend that you: 

  • Know and understand the tax recording requirements for your country or state. 
  • If you're a team member, request permission to access and manage the account setup.

Adding tax rates and groups

You can add rates and use groups for multiple taxes, for example combining city and state taxes.

Add a new tax rate

Create new tax rates that apply to items sold at checkout.

To add a new tax rate:

  1. Open Workspace settings, select Sales then Tax rates.
  2. Click Add and select New tax.
  3. Enter the tax name and percentage rate
  4. Click Add.

Add a new tax group 

Combine multiple tax rates into a group, each tax still shows individually on sales receipts and reports.

To add a new tax group:

  1. Open Workspace settings, select Sales then Tax rates.
  2. Click Add and select New tax group.
  3. Enter the tax group name and use the dropdown to choose which tax rates to assign to the group. 
  4. Click Add.

Tax group names are for your reference only and won’t display on invoices. Each tax you create will be displayed individually.

Managing tax rates and groups

You can update your tax rates and groups at any time.

Edit tax rates and groups

To edit tax rates:  

  1. Open Workspace settings, select Sales then Tax rates.
  2. On the relevant tax rate or group, click Actions and select Edit.
  3. Change the tax rate or group details as needed. 
  4. Click Save.

Delete tax rates and groups

To delete tax rates:  

  1. Open Workspace settings, select Sales then Tax rates.
  2. On the relevant tax rate or group, click Actions and select Delete
  3. Select Delete to reconfirm you want to proceed.

Applying tax defaults

Setup the default taxes for your business to automatically apply to all products and services already assigned to default taxes. 

To apply tax defaults:

  1. Open Workspace settings, select Sales then Tax rates.
  2. Under Tax defaults click Manage.
  3. Use the dropdown to apply the default tax rate per location for services and products.
  4. Click Save and Apply defaults to automatically apply the tax rates to all products and services.

Once taxes are applied, taxes will be calculated on all new sales. Past sales and invoices will not be affected by this change.

TOP TIP: If any products or services are tax-exempt, you can adjust or remove the tax rate individually through your product list and services menu.

Applying tax to individual items

You can override tax defaults for individual products and services.

Apply tax to individual services 

To customize the tax applied to individual services:

  1. Open the Catalog and select Services.
  2. Create or select an existing service. 
  3. Under Sales settings, click Edit to choose and apply a tax rate for each location.
  4. Click Save to apply the tax setting. 
  5. Click Save again to update the service details. 

Apply tax to individual products

To customize the tax applied to individual products:

  1. Open the Catalog and select Products.
  2. Create or select an existing product.
  3. Click on Actions and select Edit product.  
  4. Under Pricing, click Edit next to Tax to choose and apply a tax rate for each location.
  5. Click Save to apply the tax setting.
  6. Click Save again to update the product details. 

Setting tax calculation preferences

Taxes can be automatically calculated based on your preferences for sales and reporting prices. 

To manage your tax calculation:

  1. Open Workspace settings, select Business setup then Business details.
  2. Click Edit under Business info.
  3. Go to Tax calculation and pick one of the following options for how taxes are applied to prices in sales and reporting:

     

    - Retail prices exclude tax: Tax is not included in the displayed retail price. Instead, it is calculated and added on top of the listed price at the point of sale.

    - Retail prices include tax: The retail price displayed already includes tax. The tax portion is automatically calculated and indicated as part of the total price, making it clear what portion of the payment is going towards taxes.
  4. Click Save.

TOP TIP: Every country and state has its own requirements for recording taxes, remember to check that your taxes are being applied correctly for your country before issuing receipts. For example, in the United States, taxes are typically added on top of the sales price (tax exclusive). In many other countries, taxes are included in the sales price (tax inclusive).

FAQs

Q. How is tax calculated on sales?
When you make a sale, the tax for each item is automatically calculated based on the rate you've set. You can choose to list your retail prices as either tax-inclusive or tax-exclusive.

  • Retail prices excluding tax:
    If selected, all taxes will be calculated using this formula: Tax = Retail * Tax
    For example, 20% tax on a $10.00 item comes to $2.00

  • Retail prices including tax:
    If selected, all taxes will be calculated using this formula: Tax = (Tax Rate * Retail Price) / (1 + Tax Rate)
    For example, 20% tax on a $10.00 item comes to $1.67

Q. How do I know if my taxes are being applied correctly?
Review your tax settings under Workspace settings, Sales then Tax rates where you can check that they match the tax regulations of your country.


Q. Can I apply different tax rates to different products or services?
Yes, you can adjust or remove tax rates for individual products through your product list and services menu.


Q. Can I create multiple tax groups?
Yes, you can create and manage multiple tax groups to apply different sets of taxes as needed.


Q. Will tax group names appear on invoices?
No, tax group names are for internal reference only. Individual taxes within the group will be displayed on invoices.

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