# Tax Calculation is wrong

Hi there,

I’m Martin, I’m a new user of SambaPOS but already in love with the product.

I have been playing around with things for a few days now and pretty much have it working how I want apart from Tax. I’m based in the UK so have a single rate of VAT (20%).

I followed the guide at http://sambapos.org/wiki/doku.php/en/how_to_configure_multiple_taxes but obviously only added a single rate. I set all tax included under the ticket type.

Unfortunately when I create a new ticket and add an item, the tax is only around 17%. I’ve tripled checked and I have set it as 20. Is there an obvious thing I’ve missed that someone can think of?

Thanks for anyone help.

–Martin

Item that is £5 shows £0.83 tax on screen instead of £1.

VAT is not 20% of £5.
VAT is charged on the net price, £4.17 + 20% is £5.00

Subtotal/Net Total £4.17
VAT £0.83
Total £5.00

Your confusion is that there is £1 of VAT for every £5 of Net/Exc Price.
£5 exc is £1 VAT making total price £6

Cleaner example is £120.
£120 is £100 before tax (20% of 100 being 20)

To get amount of VAT on a GROSS price you would divide by 6 NOT 5.

Dont worry, always used to catch me out that one

Some handy calcs for VAT @ 20%

Gross Price -> Amount of VAT = Divide by 6
Gloss Price -> Net Price = Divide by 1.2
Net Price -> Amount of VAT = 20% or Divide by 5 OR multiply by 0.2
Net Price -> Gross Price = Multiply by 1.2

This is on presumption your products are set to price includes VAT at £5 which I guess you are as we do display prices as gross/inc VAT for retail/consumer sales in UK

You can choose whether to include tax in price or not.

JTRTech has demonstrated what happens when Tax is included in the price, and the calculation is in fact correct.

If you want to see a Tax of 1 added on top of 5, then do not include Tax in the product price…

hahaha I now feel like the biggest idiot. Thank you so much! I knew it would be something simple.

I hope you both have a great day.

Don’t worry, used to catch me out all the time and is a mistake I have seen many make often people that should know better.

it is correct. when you say tax is included the claculation method is this (5/1.20)*0.20=0.83333
the first part n/1.20 will give you the taxable amount then taxable amount *0.20 will give you the vat amount.

What you want is 1 so the work around this will the (1/0.20)*1.20=6

Guys i am able to see what you are doing here but i still cant get it. in my case i would like to calculate 16% tax on tax included price. so eg, i expect item priced at K10 tax included to be K8.4 before tax and K1.6 to be my tax.

But i can see this is not the case here, where am i going wrong because surely i have wrong calculation. Kindly someone to shade more light on fomula for VAT.

ok some cool acounts person just explained on how to get the tax exclusive price in my case K10 - (16/116)*10, this is the same thing explained on above but i guess i needed to hear it from someone

The price of a product/item without anything on it is always at 100%

Tax Exclusive Mean the Price being shown on the shelf/Menu is without Tax ie the price of the product without anything added on it which is at 100%

Tax Inclusive Mean the Price being shown on the shelf/Menu is the price of the product plus tax ie the price of the product without anything added on it which is at 100% + tax(VAT 16%) = 116%

So For KSH 10, When we say its Tax inclusive in simple terms we are saying, that price is the price for the products PLUS Tax. =116%

To get VAT if 116%= KSH 10
Therefore 16% =(16%X10) /116%

Once Again this is where people overlook
The price of a product/item without anything on it is always at 100%

The simple dictionary Meaning of INCLUSIVE is with everything included
The word is everything

In our context: its Tax included or Price for the Product plus Tax ie 100% +16%

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