How to setup Tax in WooCommerce

WOOCOMMERCE SERIES PART – 04

Setting up of tax is an essential task for your online store. Meeting the tax duties and other legal obligations of the state of the country are necessary. Most people find it a difficult procedure to complete. WooCommerce provides you with better options and simplified the entire procedure for your easy understanding.

Video Tutorial :

ENABLE WOOCOMMERCE TAX OPTION

To begin with, you need to open the WordPress dashboard and select SETTINGS from it. This will take you to the general settings page of the WooCommerce. Scroll down and you can see the ENABLE TAXES option. Check the box named “Enable tax rate and calculations”.

This will create a separate tab for tax in WooCommerce settings.

If you have already enabled the option, you will get direct access to the WooCommerce tax option by going to WooCommerce settings and selecting Tax from it.

EXPLORING TAX OPTIONS

Now lets check each available option in detail.

PRICE ENTERED WITH TAX

Here you can choose whether you want to enter prices inclusive or exclusive of tax.

You have 02 options available here

  • Yes, I will enter price inclusive of tax
  • No, I will enter price exclusive of tax

When you choose the first one,It will allow you to calculate prices inclusive of your store base tax.

If you are going for the second option, the prices will be exclusive of tax. In this case, you will need to calculate tax as an additional price component during checkout.

CALCULATE TAX BASED ON

From here you can choose one location based on which the tax will be calculated

You have 3 options available here.

  • Customer shipping address
  • Customer Billing address
  • Shop base address

SHIPPING TAX CLASS

Here you will be able to determine which tax class will be applied for the shipping. As a default, it has been set based on the cart items itself. So if any of your buyers add a product that classified as a separate tax rate, Then the tax for the shipping will also be calculated at a similar rate. But you can definitely go for another method if your tax jurisdiction does not comply. Select the appropriate one from the dropdown box.

ROUNDING

By enabling this option, you can round the taxes on the check out page at the subtotal level Or it will be rounded per line as default.

ADDITIONAL TAX CLASSES

You can create additional tax classes based on your tax requirements. WooCommerce provided additional tax classes such as Reduced rate and zero rates apart from the default Standard rate. You can also further configure thus created tax class according to your tax requirements.

In order to create a new one just type the new tax class name in the text box and save changes. So you can see the new tax class tab appeared on the top along with other tax classes.

DISPLAY PRICES IN THE SHOP

This determines how the price will be displayed in the front-end of your store, whether inclusive or exclusive of tax. You can choose one option according to your need from the dropdown box.

DISPLAY PRICES DURING CART AND CHECK OUT

Similar to the above option you can also determine whether the price displayed on the cart and check out page should include tax or exclude it.

PRICE DISPLAY SUFFIX

This option helps to display a text after the price of your products.

Eg: Including Tax

You can also set to alternate your price display as exclusive or inclusive of tax using either of the 2 options – { price_including_tax} or { price_excluding_tax} .

DISPLAY TAX TOTALS

From here you can determine how to display the tax total during the checkout. Whether to display multiple taxes clubbed together as one total or each one listed as a separate item.

You can choose “as a single total “ or itemised from the drop down.

Once you are done with updating the details, don’t forget to hit save changes.

SETTING TAX RATES

Once the general settings for the Tax have completed let’s start setting tax rates. You can set up the tax rate according to your country and store preferences. Select the tax class which you have to add the tax rate.

Here I am selecting “Standard rate”. A new page appears. In this page, we can insert a number of rows for each and every area you prefer to sell your product.

Let me explain each options for you.

Country code: This is the 2 digit code of the country for the rate. For example US for United States. If you leave this field empty, it will apply fr all the countries.

State Code: This is the 2 digit code for the state. For example, BE for Belgium. If you leave this field empty, the rate will apply to all the states within that specific country.

Postcode/Zip: This is the ZIP/ Postcode for the tax region. You may separate multiple values with a semicolon (;). This field also allows wildcard and numeric ranges for postcodes. Leaving blank will result in application to all areas. For example, you can add 70* to apply the tax rates to all zip codes starting with 70 or also you can provide a range such as 70000 – 80000 so that the tax rate will apply to all ZIP codes which will come under this range.

City: enter the name of cities separated with a semicolon for applying the tax rates to the specified cities or leave it blank for applying to all cities of the specified country.

Rate: This is the space for entering the tax rate for the areas that you have selected. Enter the rate with 04 decimal places. For example to set a tax rate of 20% enter 20.0000 and 11.2000 for 11.2%.

Name: Here you can enter a name for your Tax rate.

Priority: Choose a priority for this tax rate here. Only one matching rate per priority will be used. If you want to define multiple tax rates for the single area you need to specify a different priority per rate.

Compound: You can tick the compound rate if you want to apply this defined rate on the top of all the other taxes. For example, If you have an additional tax under some special jurisdiction along with regular sales tax, you can decide whether it should be calculated with product price alone or by also including regular sales tax.

Shipping: If you want this rate to be applied to shipping as well, check this box. The defined tax rate will be applied to the product price and shipping charges. If you leave it unchecked, then the rate will only be applied to the product price.

Once you are ready with your tax rates, click on SAVE CHANGES.

Hope you have understood basics of setting up tax in WooCommerce. Kindly comment for any further clarifications required.

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