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How Does the POS Calculate Sales Tax?

30
Nov

To clarify how taxes are calculated on your receipts, let’s look at an example.

Initial situation: You have 5 items. Each of these items has a net price of $0.99 and are taxed at a rate of 19%, each of which corresponds to a gross amount of $1.18  ($0.99  * 1.19 = $1.1781 rounded to$1.18). There are two legally accepted procedures to calculate the value added tax:

The net amounts are added together on the receipt and the tax is then applied to the sum: ($0.99  * 5) * 1.19 = $5.8905 rounded to $5.89.

The tax is calculated on the basis of the posting method, rounded and then added together: ($0.99 * 0.19) * 5 = $5.90

The checkout uses the second method, usually resulting in a deviation of $0.01  from the first procedure. However, the second method has the advantage that you always have the same tax rate regardless of the quantity of an item sold, so it makes no difference whether you sell item 5x individually or together on a receipt.

To get full directions on how to set up your taxes please refer to our Tax Set Up Page.