SlickPie allows you to keep track of your income and expenses based on the taxes. There are three ways taxes are being applied and calculated, Compound Tax, and Recoverable Tax & Non-Recoverable Tax.
Here we will talk about Compound Tax. Visit Recoverable & Non-Recoverable Tax for more information.
Compound Tax is a tax that is applied on top of the primary tax. In other terms, a compound tax is added to the subtotal of the product/ service provided plus the taxes applied to it.
Create a Compound Tax
As Compound Tax is on top of the base tax, you need more than one component to add a compound tax.
For instance, Paula created a Standard Tax with the following components and selected HST as Compound Tax.
When Paula creates an invoice with Standard Tax, first the non-compounded tax (GST & PST) is calculated on the line item. Then Compound Tax is calculated on the sum of the line item and sum of non-compound tax.
As in the invoice above:
- GST (5%) on $330.00 is $16.50
- PST (7%) on $330.00 is $23.10
- Tax Total is $39.60 and the Total will be $369.60.
- Since Compound Tax (2%) is calculated on Total of Line Item and Taxes, it will be $7.39 on $369.60 making it the Total of $376.99.
Thus the Taxes calculated is $46.99.
Please note You can not edit/ delete a tax if a transaction is posted using that particular tax.