Applying taxes on a sales receipt

Applying Taxes on a Sales Receipt

Most sales receipts include one or more tax rules (such as sales tax, VAT, or goods tax) calculated on the subtotal. Taxes are usually set at the product level, but you can also adjust or override tax rates on individual receipts. The tax amount is added to the receipt total before payment.

Before you start

• You must have permission to create or edit sales receipts.
• The sales receipt must be in draft status.
• A system administrator must configure tax rates first. Most products already have a default tax rate assigned.
• You need to know the tax rate (if overriding the default) and which type of tax applies (e.g., VAT, sales tax).

Steps

1. Go to Sales Receipts → New Sales Receipt or open a draft receipt. Open in Usystems

2. Add line items to the receipt.

3. On each line item, check the Tax field. It usually shows the default tax rate configured for that product (e.g., "VAT 10%").

4. To change the tax on a line:

   • Click the tax field or dropdown on that line.
   • Select a different tax rate from the list, or leave it blank for no tax on that line.

5. Scroll down to the Summary or Totals section. The system automatically calculates and displays:

   • Subtotal (before tax)
   • Tax amount (sum of all line taxes)
   • Total (subtotal + tax)

6. Review the tax calculations, then Save or Confirm the receipt.

Accounting impact

When the receipt is confirmed, the tax amount is posted to a tax liability account (usually called "Sales Tax Payable" or "VAT Payable"). The revenue account is credited for the subtotal, and the tax liability account is credited for the tax amount. This tracks your obligation to remit tax to the government.

Tips & common mistakes

• Tax is calculated from the discounted price: if you apply a line or document discount, the tax is calculated on the final price after the discount, not the original price.
• Some products are tax-exempt: if a product has no tax rate assigned, the tax field will be empty. This is intentional for tax-exempt items (like certain services or goods).
• Override tax carefully: changing the tax rate on a receipt overrides the product's default. Only do this if the transaction requires a special rate.
• Mistake: forgetting that tax is inclusive or exclusive. In some jurisdictions, the displayed price includes tax; in others, tax is added. Check your system settings if you are unsure.