Finance

Tax Rates

Learn how to collect and report taxes with ServiceWorks

ServiceWorks allows you to define any number of tax rates and apply them to Invoice, Estimates and Sales Orders. However, we won’t automatically set them on your behalf.

When applying tax rates, ServiceWorks calculates the total tax amount per tax rate, and summarizes it in a table that you can export into tax summary reports.

Creating tax rates

If you’re working with a small number of tax rates, you can manage and create them in the Company Setting. After creating tax rates, you can apply them to invoices, Estimations and Sales Orders.

Create a catalog of tax rates that meet the requirements for the jurisdictions that you do business in. For example, if you operate in Europe, you might want to create a catalog of tax rates for MOSS VAT.

Tax Exempt

You can set exemption status of a customer to exempt or non-exempt. You can collect tax for exempt customer as well on certain labor or parts.

Using Multiple Tax Rates

ServiceWorks doesn’t support multiple tax rates for the same type of service or parts. You can set up labor and sales tax separately and apply them to labor and sales charges. However it will be the same labor tax and same tax that will be applicable to those items. You can make labor or sales item non-taxable.

Tax Amounts

When you apply tax rates to an invoice, they’re aggregated into the {TotalTax} attribute. This attribute represents the sum of all tax amounts, per tax rate, over the entire invoice.

You can show the total of item tax with attribute {ItemChargeTaxAmount}. This attribute represents the sum of all parts/item tax amounts, per tax rate, over the entire invoice.

You can show the total of item tax with attribute {ServiceChargeTaxAmount}. This attribute represents the sum of all service/labor charge tax amounts, per tax rate, over the entire invoice.

You can show the total of item tax with attribute {OtherChargeTaxAmount}. This attribute represents the sum of all other charge tax amounts, per tax rate, over the entire invoice.

Rounding

When determining tax amounts, ServiceWorks rounds at the invoice item level to the second decimal before summing across the entire invoice.

NameAmountTax RateTax Amount
(Before Rounding)
Tax Amount
(After Rounding)
Totals
Line Item1$2.4315%$0.3645$0.36$2.79
Line Item 2$4.8415%$0.726$0.73$5.57
$1.09$8.36

Discount

Discounts are always applied before tax. This example shows how we apply discounts to an exclusive tax rate.

INVOICE ITEMAMOUNTDISCOUNT %DISCOUNT $POST DISCOUNTTAX RATETAX $TOTAL
FormulaAmount * DiscountAmount - Discount$PostDiscount * TaxRatePostDiscount + Tax$
Line item 1$5.0010%$0.50$4.505% exl.$0.23$4.73
Line item 2$10.0010%$1.00$9.005% exl.$0.45$9.45
Total$15.00$1.50$13.50$0.68 (@ 5% exl.)$14.18

Tax Reporting

Any business collecting taxes ultimately needs to remit tax to the appropriate government.

There are several reports you can export.

  • Sales Tax Updated Report: This report gives you job/sales level detail of tax and also the summary of tax.
  • Earnings Report: This report shows the summary of taxes by Chart of Accounts.