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Creating and specifying taxes
Creating and specifying taxes

Creating tax rates, tax groupings, tax collection methods and specifying which items to tax and which items not to tax

Justin Morabito avatar
Written by Justin Morabito
Updated over a week ago

You can set up Sprout Studio to bill your clients to your exact requirements. With Sprout, you can create as many Tax Rates as you need, and you can even combine two or more taxes into a Tax Grouping.

How to create a tax rate

To create a new tax rate, go to Settings > Pricing > Taxes and click the "+" button in the "Taxes" section.

When creating (or editing) a tax rate, you can specify the name of the tax as it shows up on your invoices, the percentage of the tax and your tax number. If you specify a tax number, it will be displayed at the bottom of the invoices.

How to create a tax grouping

A tax grouping is a collection of more than one tax rate. To create a new tax group, go to Settings > Pricing > Taxes and click the "+" button in the "Taxes". Click the "three dots" button, and then specify which tax rates you'd like to combine in the new tax grouping by clicking add to group. In order to select this option, you'll need to have at least 2 taxes set up in the system already.

How to specify which items get taxed

Whenever you create an order or specify a package, you can choose which products, services and prints are to be taxed. A product, service, print or package will have its default settings set to be what they were specified to be when you created the price list, however, you can override them:

  1. When creating a booking proposal, as you add your packages, you can specify which items are to be taxed by toggling the "Tax" toggle.

  2. When creating an order, as you add the items, you can specify which items are to be taxed by toggling the "Tax" toggle.

How to specify how taxes are calculated

When creating orders with a payment schedule (i.e. in a booking proposal), there are two ways to specify how the tax is to be calculated:

  1. On the final payment, which means that all of the tax for the entire order is added to the final invoice.

  2. On each payment, which means that the tax for each invoice is added to that invoice's total.

Which calculation method you choose to go with will depend on how your bookkeeper or accountant recommends you set up your receivables.

To set how your tax is calculated, go to Settings > Account > Account Defaults and select the preferred method of collection in the "Tax Defaults" section.

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