Tax Code Types
- tax rates
- tax
- tax code
In this guide we will cover:
- Types of Tax Code
- What Each Type Sets
This guide will cover each Tax Code that can be set within the system, where it is set, and when it is used.
| Tax Codes | Where is it set? | Related to an Integration? | When is it used? |
| Item tax code/Product tax code | Configuration > Billing > Tax > "Default item tax code for new customers" Overridden on the Customer profile > Billing tab > Tax Settings dropdown > "Product tax code" If set to "Use Product Tax" or "Use Product Group Tax", it will follow the code set in the Product > Billing tab > Tax code (Sales)/(Purchases) or the Product Group > Billing tab > Tax code (Sales/Purchases) | ❌ | This tax code is used when Items/Products are purchased into Stock or sold to Customers. "Tax code (Sales)" is used when selling the Product, i.e. sales orders. "Tax code (Purchases)" is used when buying the product, i.e. purchase orders. |
| Sales tax code | Configuration > Billing > Tax > "Default sales tax to use for new customers" Overridden on the Customer profile > Billing tab > Tax Settings dropdown > "Sales Tax Rate" | ✓ (Xero) | This tax code is used when integrating with Xero, and corresponds with Xero's "Sales tax rates". |
| Purchases tax code | Configuration > Billing > Tax > "Default purchase tax to use for new customers" Overridden on the Customer profile > Billing tab > Tax Settings dropdown > "Purchases Tax Rate" | ✓ (Xero) | This tax code is used when integrating with Xero, and corresponds with Xero's "Purchases tax rates". |
| Labour tax code | Configuration > Billing > Tax > "Default labour tax code for new customers" Overridden on the Customer profile > Billing tab > Tax Settings dropdown > "Labour tax code" | ❌ | This tax code is used when invoicing for Labour completed on Tickets. It calculates the Tax percentage based on the rate of the Charge Type used. |
| Agreement tax code | Configuration > Billing > Tax > "Default contract tax code for new customers" Overridden on the Customer profile > Billing tab > Tax Settings dropdown > "Agreement tax code" | ❌ | This tax code is used when the labour time on a Ticket exceeds the hours on a Fixed contract. |
| Prepay tax code | Configuration > Billing > Tax > "Default prepay tax code for new customers" Overridden on the Customer profile > Billing tab > Tax Settings dropdown > "Prepay tax code" | ❌ | This tax code is used when invoicing for Pre-Pay - either from a Pre-Pay Agreement or on the Customer. |
Note: If the checkbox setting "Allow item tax code to be overridden on Quotations, Sales Orders, Purchase Orders and Invoices" is enabled in Configuration > Billing > Tax Settings, then any change to tax made at this level will prevail over other existing defaults.