Tax Groups are a collection of Tax Rates that get attached to Menu Items. A Tax Group can hold one or more Tax Rates. This article will explain how to create Tax Groups and Tax Rates and apply the groups to the correct Menu Items.
- How to Create a Tax Group
- Assigning a Tax Group to an Item
- Mass Assigning Tax Groups
- Tax Exclusive vs. Tax Inclusive Pricing
- How Do Taxes Get Applied on Discounted Orders?
- How Do Surcharges Get Applied on Discounted Orders?
How to Create a Tax Group
Create tax groups to automatically add the correct rates to all your items.
To get started with creating Taxes navigate to Configuration > Order Adjustments > Taxes.
You can create and manage tax groups on this page. Tax Groups are applied to individual menu items that belong to a menu that is tax inclusive. To Create a Tax Group click the New Tax Group button in the top right.
Tax groups have the following information:
- Tax Group Name - The name of the tax group
- Description - A description of the Tax Group
Click Add Tax Rates to:
- Tax Rate Name - The Name of the Tax Rate. The best practice is to use unique names for each Tax Rate. Do not repeat the same Tax Rate name.
- Receipt Label - The name that will appear on the receipt for that Tax Rate
Note: Be sure to make receipt labels unique. Using the same receipt label in multiple rates within a Tax Group may result in issues with the label properly appearing on the receipt.
- Rate - The percentage of Tax added to the total
Repeat these steps as needed to add as many Tax rates as you need. You can always delete the Tax Rate by clicking the Delete button.
Assigning a Tax Group to an Item
Click the item you want to add a tax group scroll down to Groups.
Click on the Tax group box and type the name of the Tax group.
If the Tax group does not exist you will be prompted with a create button.
Mass Assigning Tax Groups
1. Select items by clicking the box next to their name
2. Type the name of the tax group
Tax Exclusive vs. Tax Inclusive Pricing
When creating a new Menu under POS Manager>Menu Manager, you will select whether your prices are Tax Exclusive or Tax Inclusive. Depending on your selection below, the system will apply the tax group (which holds the rates) differently to the menu item.
Tax Exclusive Menu - Prices on this type of menu do not include tax. Customers will pay tax as an addition to the menu price and taxes will be applied on the tender screen.
Tax Inclusive Menu: Prices on this type of menu will assume your taxes are included in the menu price, meaning, there will be no additional charge to customers for taxes outside of the listed menu price. Please see example above.
Tax Inclusive (continued) - Manager system will automatically adjust your menu price to properly reduce your menu price (to adjust for your tax rate), calculate taxes, and sum those to equal your listed menu price.
How Do Taxes Get Applied on Discounted Orders?
To calculate the taxes for each line item, we use the value of the line items after discounts have been applied. Additionally, we have two different ways taxes can be applied, exclusive of price or inclusive.
Tax Exclusive
| Subtotal: | $100.00 |
| 10.5% Tax: | $10.50 |
| Total Due: | $110.50 |
After Discount:
| Subtotal: | $100.00 |
| 10.5% Tax (after 50% discount applied): | $5.25 |
| Discount 50% off of subtotal: | -$50.00 |
| Total Due: | $55.25 |
Tax Inclusive
Before Discount:
Item True Price is $100 - $9.50 = $90.5
| Subtotal: | $100.00 |
| 10.5% Tax (Included): | $9.50 |
| Total Due: | $100.00 |
After Discount:
| Subtotal: | $100.00 |
| 10.5% Tax (Included): | $4.75 |
| Discount 50% off | -$50.00 |
| Total Due: | $50.00 |
How Do Surcharges Get Applied on Discounted Orders?
Tax-Free Surcharges
To calculate the tax-free surcharges for each line item, we use the value of the line items before discounts have been applied. Additionally, we have two different ways taxes can be applied, exclusive of price or inclusive.
Tax Exclusive
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $1.00 |
| Total Due: | $12.00 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.50 |
| Total Due: | $6.50 |
Tax Inclusive
Before Discount:
Item True Price is $10 - $0.91 = $9.09
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $0.91 |
| Total Due: | $11.00 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.46 |
| Total Due: | $6.00 |
Taxed Surcharges
To calculate the taxed surcharges for each line item, we use the value of the line items before discounts have been applied. Taxes applied to surcharges are not affected by the discount. For example, a 10% tax applied to a surcharge of $1 will remain $0.10 before and after the discount.
Tax Exclusive
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $1.10 ($0.10 is from the $1.00 surcharge) |
| Total Due: | $12.10 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.60 ($0.10 is from the $1.00 surcharge) |
| Total Due: | $6.60 |
Tax Inclusive
Before Discount:
Item True Price is $10 - $0.91 = $9.09
| Subtotal: | $10.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax: | $.91 |
| 10% Tax from Surcharge: | $0.10 ($0.10 from the $1.00 surcharge) |
| Total Due: | $11.10 |
After Discount:
| Subtotal: | $10.00 |
| Discount 50% off of subtotal: | -$5.00 |
| 10% Surcharge: | $1.00 |
| 10% Tax (after 50% discount applied): | $.46 |
| 10% Tax from Surcharge: | $0.10 ($0.10 from the $1.00 surcharge) |
| Total Due: | $6.10 |