Firmhouse allows you to create as many tax records as you need. You can then apply them to your products and/or plans.
Creating a new tax rate
You will find your tax rates in Settings > Taxes & Invoices. This is where you can create new records or edit existing ones.
After creating a new project you will see that we added a basic tax rate for you. Make sure to either edit or archive it if needed.
Fixed, Dynamic or Exempt?
When creating a new tax rate you have three options to choose from.
- A fixed amount that is always the same (great if you need to distinguish between non-food & food products)
- Let us calculate the tax dynamically based on the customers address. Dynamic tax rates are always calculated excluding tax.
- Tax exempt if no tax needs to be calculated (use this instead of creating a 0% tax record)
Inclusive vs Exclusive
A fixed tax rate can either be exclusive or inclusive. Dynamic tax rates are always exclusive.
An exclusive tax is not included in the invoice subtotal, whereas an inclusive tax is.
The following example illustrates how the pricing differs, depending on whether the tax rate is inclusive or exclusive
Applying tax rates to your plans and products
After creating your tax rate(s) you can now apply them to your products and/or plans.
Go to your plan/product, edit it (or create a new one) and scroll down to "Tax Rate"
Choose which tax rate you want to apply and click save.
That's it! Your customers will now get charged tax based on the rate you applied.
You can create as many products/plans with as many tax rates as you'd like.
Setting a tax rate for manual payments/invoices
You now know how to set tax rates for products/plans. But there will be payments unrelated to those. Such as manual payments/invoices
These type of payments rely on the project wide tax rate.
Go to Settings > Tax & Invoices and scroll down to "Tax". There you will find the setting to define which tax rate should apply to any other payments.
When creating a manual payment you will now see that this tax rate will be applied: