Woocommerce Tax Calculation

Question

South Africa's VAT just increased from 14% to 15% effective 1st April 2018.

We have increased the Standard Tax rate in the settings to 15% like so:

On the checkout page I'm adding a product worth R450 to the cart. It calculates to include VAT worth R58.70.

58.7 / 450 * 100 = 13

The Tax settings page looks as follows:

Is there a setting that is incorrectly set?

** EDIT **

I've tried to:

Clear all transients
Delete Tax calculations and re-enter them to no avail.

If I assume that the R58.70 is indeed 15%, I would arrive at a total of R391.33

What could the difference of R58.66 (R450 - R391.33) be?

Here are various VAT calculations based on different percentage values:

12% - R48.21
13% - R51.77
14% - R55.26
15% - R58.70
16% - R62.07
17% - R65.38
18% - R68.64

Not sure can you please elaborate your problem what you want to achieve? Do you want to set up 450+tax? — Vignesh Pichamani, Apr 04 '18 at 08:05
Sure @VigneshPichamani . 15% of R450 should equal to 67.50 NOT 58.70 — Marcus Christiansen, Apr 04 '18 at 08:08
May be some sort of cache problem, try switching prices entered with tax - I mean change it, refresh the check out page, then revert the changes . — Blesson Christy, Apr 04 '18 at 08:16
@BlessonChristy clearing transients doesnt work, neither does resetting the tax calculations. I made an edit to the original post. — Marcus Christiansen, Apr 04 '18 at 08:28
@MarcusChristiansen can you try other rates like 13%, 14%, 15%, 16%... and see what values you are getting for each... — Reigel Gallarde, Apr 04 '18 at 08:32
The WooCommerce calculations are correct. To calculate VAT having the gross amount you should divide the gross amount by 1 + VAT percentage (i.e. if it is 15%, then you should divide by 1.15), then subtract the gross amount, multiply by -1 and round to the closest value — Grant, Apr 04 '18 at 09:05

score 3 · Accepted Answer · answered Apr 04 '18 at 08:51

I think you misunderstood the calculation behind tax rate of both inclusive and exclusive.

From your settings you choosed "Yes, I will enter prices inclusive of tax" means you enter your price along with tax, so your overall price including tax will be R450

Let i describe the calculation behind exclusive and inclusive

Exclusive Tax Calculation:

$tax_rate = 15% => 15/100 => 0.15
$price = R450
$total_tax = 450*0.15 = R67.50(tax)
$total = $price+$total = 450+67.50 => R517.50

Inclusive Tax Calculation

As you set yes i enter price inclusive of tax and hence need to find the excluded tax price of R450

tax excluded price  = total item price / ((tax rate /100) + 1 );

You have to find the excluded tax amount first means

$tax_excluded_price = 450/(0.15+1) => R391.304347826(without round);

in this case you have to calculate the tax amount

$tax = $totalprice - $tax_excluded_price;

$tax = 450 - 391.304347826 => 58.695652174 => R58.70(round)

$totalprice = R450($tax_excluded_price+$tax);

As per your queries if you select No, i will enter price exclusive of tax then you can expect your result.

Hope it helps.

You just beat me to this answer, agreed the calculations are correct in WooCommerce for inclusive VAT @15% — Grant, Apr 04 '18 at 09:02

Woocommerce Tax Calculation

1 Answers1