How to Configure WooCommerce Tax Settings

0
804

One of the most essential steps you take while setting up an online store is working out taxes. If calculating accurate tax calculations complying to the legal obligations of your country or local area is getting a bit complicated, don’t hesitate to get professional help. WooCommerce attempts to provide settings as straightforward as possible to make the process easier. Let’s go through the basic procedure to configure WooCommerce tax settings on your online store.

Enabling taxes

Firstly, you have to enable taxes in the General settings tab.

Enabling Tax Settings
Enabling tax settings

This will create a separate tab for Tax in WooCommerce Settings. You can go to this tab by navigating through the following path:

WooCommerce → Settings → Tax

Navigating Tax Settings
Navigating tax settings

The Tax tab looks like the screenshot below:

Tax tab
Tax tab

Various tax options

Now, we will look into each setting in detail. First you have to decide how you input prices for your products. There are two options with a radio button, where you can choose to keep prices inclusive or exclusive of tax. If you decide to go with the second option, the prices of the products that you input will be exclusive of tax. In this case, you need to calculate tax as an additional price component during checkout.

Setting up price input
Setting up price input

Next option will determine which location you are using to set up your tax from. You can select any of the three choices from the drop-down.

  • Customer shipping address
  • Customer billing address
  • Shop base address
Choosing location to base tax calculation
Choosing location to base tax calculation

Shipping tax class

Next setting determines how you can define Shipping Tax Class on your store. In most scenarios, shipping tax class is based on the items in the cart. That means if your customer adds a product that falls under a different tax rate, the tax for shipping will also be calculated under that same rate. You can choose the default option for this setting which is Shipping tax class based on cart items. If your tax jurisdiction doesn’t allow for this, you can select another tax class.

You can select the appropriate option from a drop-down. If you’ve already set a customized tax class, you can see that too among the choices in the drop-down.

Setting shipping tax class
Setting shipping tax class

There is a checkbox that determines tax rounding in the cart. You can tick the checkbox if you want to round tax at sub-total level rather than the default rounding per line option.

Determining tax rounding levels
Determining tax rounding levels

You can create additional tax classes based on your tax requirements. Apart from the default Standard Rate, WooCommerce has already set two additional tax classes – Reduced Rate and Zero Rate.

Additional tax classes
Additional tax classes

To create a new tax class, enter the names (one per line) in the text field.

Adding new tax classes
Adding new tax classes

Once you create and save the new tax classes, they will be displayed as a tab on the top of the screen.

Displaying tax classes tab
Displaying tax classes tab

You can set the rate for the newly created tax class by clicking the name and entering all the required data.

Setting rates for tax classes
Setting rates for tax classes

Price display on store

Next, there are two settings where you can determine whether prices will be displayed inclusive or exclusive of tax on the front-end of your store. These are Display Prices in the Shop and Display Prices During Cart and Checkout. Choose ‘Including tax’ or ‘Excluding tax’ according to your preference.

Displaying Prices
Displaying Prices

Price Display Suffix helps to display a text after the price of your products. This can be something like “inclusive of VAT.”

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

Setting price display suffix
Setting price display suffix

Finally, you can set how to Display Tax Totals during 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 ‘Itemized’ from the drop-down.

Displaying tax totals
Displaying tax totals

Once you complete updating the settings, do not forget to click Save changes button.

We have covered the basic tax settings in WooCommerce. Your tax calculations are dependent on the legal obligations of your store base and selling location. Read more about the basics of sales tax calculations before setting up taxes on your store. Read more on the topic and get professional help if required.