Global tax rates can be a tricky business, so we've made it simple to apply the tax component to your projects, wherever you are in the world.
Here we'll show you how to configure your tax rates at account level, project level, and schedule level; and how to specify whether products are inclusive or exclusive of tax.
How to set up tax rates at Studio level
Head to your account Settings via the dropdown menu next to your studio name
Select the Invoicing tab, and scroll to Tax Settings
Click '+ Add Tax Rate' to begin
Setting up a single tax rate
A single tax rate is an individual rate for a country or region. An example of this might be GST in Australia. To configure this setting:
Select the 'Single' tab
Enter the Name of your tax rate (how you'd like this to appear on your Schedule)
Enter the tax Rate
Give your rate a Description (an explanation or expansion on your rate's name)
Choose whether you'd like to set this as your default rate (this will appear by default on all future projects, but can be re-configured at project level on the fly)
Click 'Add Tax Rate' to save
Setting up a combo tax rate
A combo tax rate is comprised of multiple rates for a country or region. An example of this might be state vs local sales tax in the USA. To configure this setting:
Select the 'Combo' tab
Enter the Name of your tax rate (how you'd like this to appear on your Schedule)
Give your rate a Description (an explanation or expansion on your rate's name)
Next, enter a Nickname and Rate for each rate within your combo, selecting '+ Add another rate' for each new entry. The total percentage will populate below
Choose whether you'd like to set this as your default rate (this will appear by default on all future projects, but can be re-configured at project level on the fly)
Click 'Add Tax Rate' to save
Setting a tax rate as default
When you select the option to 'Set as default', this will be the tax rate that auto-populates for each new project you create. In your Settings, your default tax rate will be highlighted, and you can head here to update this setting at any time.
Although your tax rate will appear on new projects by default, you can alternate between your saved tax rates at project level. Continue reading to find out more about how this works.
Archiving a tax rate
At any time, you can archive a tax rate by heading back into Settings > Invoicing > Tax Settings.
Here, you'll notice a 3 dot menu at the end of your rate line entry. Select 'Archive' from here to remove from your list.
Any archived tax rates you've used on projects until this point will still be applied to them, but cannot be selected for any future projects.
You can also still view your archived tax rates by toggling between our Active and Archived tabs.
Head back into the 3 dot menu on any tax rate to change update this status.
💡 Note: Tax rates cannot be edited. If your tax rate has been set up incorrectly, we'd recommend archiving this rate, and creating a new one in its place.
How to set up tax rates at Project level
You'll first want to ensure that your Default Tax Rate has been selected within your Invoice Settings. This will enable your tax to be applied to your products further down the line when invoicing your items - even if you would prefer to have tax switched off in your Project.
Now that you've sorted out all your different tax percentages and rates, it's time to assign them to your projects. Here's a step-by-step guide to get you started:
Click on the cog icon in your project card to access project settings.
Scroll down to ‘Tax Preferences’ and toggle on the Tax switch.
Note: this will be toggled off by default, and can only be switched on if you've set a tax rate at Studio level
From the drop-down menu, choose which tax rates you want to apply to this project. You'll find all the tax rates you've set up in your Studio settings listed here. Feel free to select multiple tax rates if more than one applies to the project.
Select whether the pricing within your Schedule should be calculated inclusive or exclusive of tax.
Once you've made your selections, save your settings by clicking on the 'Save' button at the bottom of the page.
How to set up tax rates at Schedule level
You’ve configured your tax rates at both Studio, and Project level - now let’s look at how to apply these in your Schedule.
Each individual product in your Schedule, you can specify if your Project’s tax rates should be applied.
We’ll also show you how tax will be displayed for your client when your Schedule is shared via Client Dashboard or PDF.
How to mark a product as taxable
When setting up your Schedule, the tax rates you've set at Project level will be applied to all items added.
If you head to the Financial tab, you'll see a field against each product allocated for tax. Clicking on this field will open a widget that gives you control over whether or not that particular product is taxable, and will show you the rate(s) applied.
Simply toggle off this setting if the product in question isn't taxable.
How tax is displayed
When your client is granted access to your Schedule’s pricing via the Client Dashboard , the tax component is displayed against each line item when viewing the ‘Financial’ tab.
On the live version shared with your client, the prices shown will stipulate whether they're inclusive or exclusive of tax.
How to apply tax to your invoices
It's now easier than ever to apply tax rates to your invoices!
New to creating invoices? Check out our guide on Getting started with Invoices
Applying tax to your invoice
When you create a new invoice, and select your client from the Client dropdown menu, the tax rate(s) you applied to this project will appear by default in the 'Tax' field to the right.
Click on this field to see which rates have been pre-selected, and select any further rates you'd like to apply to this invoice.
Stipulating whether individual products are taxable
All items added will then include the tax rate(s) applied at invoice level. To turn off the tax component, simply click on the line item to edit, and toggle off the 'Taxable?' field.
Click Save to ensure your changes are saved.
Syncing your Programa Invoice with QuickBooks or Xero
If you've connected your preferred accounting software with Programa, you can sync your products and services to the relevant accounts in QuickBooks or Xero.
Select the relevant revenue/income accounts from the field provided, and click 'Save' to ensure your changes are saved.
Common Questions:
If a supplier hasn't stipulated whether a product is inclusive or exclusive of tax, which option should I choose?
If a supplier hasn't specified the tax rate, we'd recommend adding this product exclusive of tax, so you can add this component at a later stage, if required.
I want to archive a tax rate, but I don't want to lose the tax applied to a project
You won't! Any tax rates previously applied to a project will still be attached to it - it'll be greyed out in that project's available tax rates, but will still show that you've selected it. You just won't be able to use this rate for future products.
Help! I archived a tax rate by mistake!
Not to worry! If you head back into your Studio Settings > Invoices > Tax Settings, and click on the 'Archived' tab, you can select the 3 dot menu against your required tax rate, and choose the option to re-activate
How does adding a markup affect the tax rate?
It doesn't. Tax and markup work independently from one another - your markup total is based off the markup percentage you've added. Whether you've turned on 'Add Markup' or not, your tax rate will still apply to the original cost of the product, as you're unable to add a markup on tax.
How will my client know if items are inclusive or exclusive of tax?
If you've shared a live version of your Schedule, with access to the pricing information, they'll see the tax rate applied against the product, with a 'Pricing inclusive' or 'Pricing exclusive' indicator against the Schedule totals.
How will tax affect existing projects without tax applied to them?
Existing projects will, by default, have the tax component turned off.
If you'd like to enter tax against an existing project, you'll first need to head into your Studio Settings > Invoices > Tax Settings and set your tax rate(s). If you try to add tax directly into a Schedule item before having set this up, you'll receive a prompt to head to your settings first.
Note: See 'Example 2' below to understand what happens to the calculation fields on your products when tax is added.
How does changing the tax rate affect my Schedule pricing?
We've put together a couple of visual guides below to show examples of how input fields are affected when your projects are inclusive of tax, vs exclusive of tax; applied before and after products have been entered into your Schedule.
In these examples, the rate applied is 10%.
Example 1 - Tax applied before entering products
Here we're looking at the same product, one has been added to a schedule with tax excluded at project level, and the other has been added to a schedule with tax included at project level:
Exclusive
Inclusive
Example 2 - Tax applied after entering products
Here we're looking at the same product again, and we see what happens when tax is applied at project level after your products have already been entered into the Schedule.
Exclusive (original - no tax applied)
Inclusive (tax applied after entry)
