WooCommerce, offers a straightforward tax configuration feature that you can setup and regulate from the settings dashboard.
Herein is the step-by-step guide on how to apply the tax rules in WooCommerce.
Step 1: Enable Tax Settings
To get started with the tax configuration on your WooCommerce store, visit the dashboard.
- On the Settings page, open the General tab
- Mark the ‘Enable Taxes’ checkbox with the message “Enable Tax Rates and Calculations”
- Click the Save Changes button at the bottom
After checking the ‘Enable Taxes’ checkbox, there will be a new settings tab for Taxes. The Tax tab has four sub-pages: Tax Options, Standard Rates, Regular Rate Rates, and Zero Rate Rates.
Step 2: Configure Your Tax Options
When you click on the Tax tab, the Tax Options page will be displayed showing a series of options to setup the tax rules as applicable in your country.
To open the Tax Options go to Settings-> Tax-> Tax Options
On the Tax Options page, you can set up taxes based on various parameters and select from a range of alternatives for each. Herein is a list of tax calculation parameters on this page and the available alternatives for each parameter:
Prices Entered with Tax: There are two alternatives for the sellers to display prices on their WooCommerce store to be setup according to the preferences chosen under this tax option:
- ‘‘Yes, I will enter prices inclusive of tax” – If you choose this option, it means the prices listed against all products on your store is inclusive of the levied taxes.
For instance, if you display $190 for a shoes for an online store in US, and it is inclusive of 8.875% tax, then the actual price of the product is $173.74 and tax charged to the customer is $16.26.
‘‘No, I will enter prices exclusive of tax” – If you do not want to go through the strenuous process of including taxes within the marked price, choose this option wherein you can display taxes separately for each product.
If you choose to display prices exclusive of the taxes, then the price of the shoes displayed on the store in the above example would be $173.74.
Calculate Tax Based On: This is the second parameter on the Tax Options page. It allows the storeowners to set up location-based taxes. You can choose from the three available options:
- Customer billing address
- Customer shipping address (set as default on the WooCommerce system)
- Store base address
Shipping Tax Class
You can choose from a multiple options when imposing shipping taxes:
- Shipping tax class based on cart items (set as default option)
- Standard (the standard rate is implemented when you choose this option)
- Reduced Rate
- Zero Rate
- My Tax Class
The rounding checkbox displays the message “Round tax at subtotal level, instead of rounding per line”.
This checkbox allows you to select the way you want to round up the taxes on the invoice.
Step 3: Set Up Additional Tax Classes
WooCommerce offers mainly three types of tax classes that you can add to your products on your store. You can view them in sub menu under the Tax tab.
- Standard Rates:
- Regular Rate Rates:
- Zero Rate Rates:
On the Tax Options page, you can also add new tax classes from the ‘Additional Tax Classes’ option depending on the type of taxation regulations in your province.
Whenever you want to add tax details, click on the specific tax class to get started.
- Display Prices in the Shop: This is the amount displayed on the product details page on the store gallery. You can choose to show the price inclusive/exclusive of taxes on this page.
- Display Prices During Cart and Checkout: Similar to the above option, you may show the price inclusive/exclusive of taxes at the cart checkout page.
- Price Display Suffix: Herein you can add a custom message for the understanding of the buyers. For instance, if the seller is based in India selling products within the country, then display the message ‘inclusive of GST’ and so on.
- Settings-> Tax-> Tax Rates (Standard Rate/Reduced Rate/Zero Rate)
- On the tax class page, click on the rows with incorrect tax information (this will create yellow highlights on the concerned rows)
- At the bottom of the rows, click on ‘Remove selected row(s)’
- To delete all taxes on this page, visit WooCommerce-> System Status-> Tools tab
- Find the option – Delete all WooCommerce tax rates
- Click on the tab titled- ‘Delete ALL tax rates’- this will remove all tax rates from the additional tax class pages
- Click on the Import CSV button the additional tax class page
- On the Import Tax Rates page- you may click on the Choose File tab to upload a CSV file from your computer
- Alternatively, you may specify a path or file if you want to upload one from any internet source
- After completing the above steps, click Upload File and Import button
- View Taxes by Code: From the admin page, click on WooCommerce-> Reports-> Taxes-> Taxes by Code. On this page, you can see all the taxes charged on the products based on different parameters- shipping, location etc.
- View Taxes by Date: Following the steps above, you can also view taxes within a specific period. Just click on Taxes by Date. You can enter a specific time span for any year to view the tax details within the selected range.
Step 4: Set Up Price Display Options
Below the ‘Additional Tax Classes’ on the Tax Options page, you will find three categories for price display.
Step 5: Display Tax Totals
This is the last step on the Tax Options page. You may choose to display the taxes as:
Itemized: Shows different types of taxes with respective charges
As a Single Total: Shows only the total amount of tax imposed on the products without respective details.
Once you are done with the abovementioned steps, just click on the ‘Save Changes’ button to complete the process on this page.
Step 6: Add/Remove Tax Rates
As stated above, you can find all the tax rates/classes under the Tax tab. Click on the specific tax class to add/remove tax details. When adding the tax details, you will need to fill in the information under the following attributes:
Country Code: Add 2-digit country code. If you cannot find your country code, check ISO 3166-1 alpha-2 codes. You may leave a blank space (*), if this rate applies to all countries.
State Code: Enter the 2-digit country code. Visit i18n/states/COUNTRYCODE.php to find the list of supported states.
ZIP/Postcode: You can multiple postcodes with different values. Separate each value with semi-colon (;).
City: Add the list of cities and separate each by adding a semi-colon (;). To apply all cities leave a blank (*).
Rate %: Use up to 3 decimals when adding the tax rate. Example- add 5.000 if your tax rate is 5%.
Tax Name: Add the tax name depending on your country tax jurisdiction. For example, GST in India.
Priority: You can set only 1 rate per priority. If you want to add multiple rates for the same area, mention separate priorities for each tax rate.
Compound: Tick this checkbox, if this is compound rate (to be applied by default on top of all priority tax rates)
Shipping: Tick the checkbox if this tax rate is applicable on the shipping
How to Delete Tax Rates
You may need to delete the tax rates when changes are implemented by the Government in your state, if any information is wrongly added to the list or if there is any misplaced data on the CSV import file.
To delete a tax rate follow the steps below:
Import/Export Tax Rate Data
If you want to download the tax rate data. Simply click on the ‘Export CSV’ button the additional tax class page.
If you want to import tax rates to your WooCommerce website, simply upload the tax rate data in a CSV file by following the steps below:
How to View Tax Reports in WooCommerce?
WooCommerce allows the admin to view taxes by rates and taxes by date.