Tax rates and tax groups

A tax rate is a named percentage your company charges on sales or pays on purchases — for example GST 5% or PST 7%. A tax group combines two or more rates into one, so that a single choice on an item or an invoice line charges both — for example BC TAX = GST 5% + PST 7%, charging 12% in total.

The Taxes screen is where you create, change and remove them. Every item has a tax, invoices and bills work tax out from it, and the sales tax return totals it.

Opening the Taxes screen

• Lists ▸ Sales Tax Code List
• Menu ▸ Admin ▸ Taxes (in the Catalog section)

Your role needs the Taxes permission (on the Workspace tab of the role). Without it, a Manager Approval box asks an Admin or Manager to approve opening the screen this once. To save changes, anyone who is not an Admin or Manager also needs the matching Tax Rates permissions (create, update, delete) on the role's Web Access tab; otherwise the save is refused with Unauthorized action.

The Taxes screen

The heading reads Taxes, with Tax rates applied to products underneath.

Each row shows:

When the company has no taxes yet, the screen reads No tax rates yet. Tap 'Add Tax' to create one (e.g. VAT@10%).

Adding a tax rate

1. Click Add Tax.
2. Type the Tax name — for example GST 5% or PST 7%. Using the percentage in the name makes lists easier to read.
3. Leave Tax group (combine rates) off.
4. Type the Rate (%) — for example 5. Decimals are allowed (9.975). Use 0 for a zero-rated or exempt code.
5. Click Add.

A green message confirms Tax rate added successfully.

Adding a tax group

You need at least two single rates first.

1. Click Add Tax.
2. Type the Tax name of the group — for example BC TAX.
3. Switch on Tax group (combine rates) (e.g. BC TAX = GST 5% + PST 7%). The switch is greyed out until at least two single rates exist.
4. Under Combine these rates:, tick each rate the group charges. Each is shown with its percentage, for example GST 5% (5%).
5. Check the Combined rate line underneath (for example Combined rate: 12.00%).
6. Click Add.

A green message confirms Tax group added successfully. A group can only contain single rates — not other groups.

The Add Tax form

Editing a rate or group

Click the pencil on the row.

• A single rate opens as Edit Tax Rate: change the Tax name or Rate (%) and click Save (Tax rate updated successfully). Every group that contains the rate has its total recalculated automatically.
• A group opens as Edit Tax Group: SeroBooks first reads the group's current members, then shows the name and the ticked rates. Change them and click Save (Tax group updated successfully). You cannot turn a group into a single rate, or a rate into a group.

Deleting a rate or group

1. Click the red bin on the row.
2. Confirm Delete in the Delete tax rate '…'? box (This action cannot be undone.).

SeroBooks refuses the delete when the tax is still in use:

If the deleted tax was the Default, the default is cleared.

The default tax for new products

Tick the Default box on a row to have new items start with that tax: new products added from Admin ▸ Products, and new services on the Services list. The choice belongs to the company, so every computer and every user starts new items with the same tax; changing it needs the right to change the company preferences (an administrator), otherwise the tick is refused with the reason. It applies to new items only — items you already have keep their tax.

If no default is ticked, a new product starts with the first tax in the list and a new service with a 0% rate.

Telling the books which tax each rate is

For your GST/HST and PST/QST returns to come out right, each rate must be linked to the right tax account. This is set in Company ▸ Accounting Setup, in the card Which tax each rate is:

• Point a rate at the Federal — GST/HST account to make it count towards the GST/HST return.
• Point a rate at the Provincial — PST/RST/QST account to make it count towards the provincial return.
• A rate left unmapped is Guessed from name, and a rate called something like "G" or "S" counts towards nothing — the return comes out short while looking normal. An amber note reads N rate(s) are still being guessed from their name. Map them to one of the two tax accounts above.
• A 0% rate shows Zero-rated.

See Accounting Setup (posting accounts) and How sales tax works in SeroBooks.

In a United States company the two accounts are called State — sales tax and Local — county and city.

Examples for Canadian provinces

Check the current rates with the tax authority before you set them up; the percentages above are examples.

Tips

• Name rates with their percentage — PST 7% is clearer on an invoice line than PST.
• Create an exempt or zero-rated code (Exempt 0%) for items and customers that are not taxed.
• Map every rate in Accounting Setup straight after creating it.

Common problems

The Tax group switch is greyed out. You need at least two single rates before you can combine them.

"Select at least 2 rates to combine". Tick at least two rates in the group.

"Enter a valid tax rate". The Rate (%) box is empty, not a number, or negative.

A tax shows in the list on this computer but not another. The other computer has not refreshed yet. Use Menu ▸ Sync DataBase there.

The sales tax return is short. A rate is not mapped in Accounting Setup ▸ Which tax each rate is. Map it to the federal or provincial account.

Related articles

• Sales Tax Code List
• How sales tax works in SeroBooks
• Tax on invoices, bills and expenses
• Accounting Setup (posting accounts)
• Manage Sales Tax
• Add or edit an item
• The Admin screen