Taxes and discounts

Fattoad · ‎01-03-2019

In our system we have tax already added to our item prices. This seems to be an issue with discounts. For example if we give a 10 percent discount it is taking the discount off the total (tax and price) instead of just discounting the item price first before the tax. Is there a way to fix this? Example. My customer is charged 10.00 which is tax included. This means the item price before tax is less than 10.00. But if we do a 10 percent discount it takes 1.00 off. But the actual item costs less than 10.00 so the discount should be less than 1.00. Is there a way to fix this without changed our tax included in our item prices?

pessosices · ‎01-03-2019

It seems like it works correctly. Because tax is a percentage added, the 10% discount comes off of the item price, and then the tax adjusts accordingly.

For your example, your item is $10 with tax included. For simplicities sake, let’s say your tax is 10%. So your item price would be $9.09 and your tax would be $0.91.

Now lets apply a 10% discount to your item price, which would be a discount of $0.91 which would bring the discounted price down to $8.18.

The 10% tax on $8.18 would be $0.82 and the new total would be $9.00. So it works!

The math works out with any tax %. I just ran the numbers with a 5% tax and it’s the same total $1 off.

Hope that was right and that it makes sense!

Pesso

Pesso - he/him
Pesso's Ices & Ice Cream
Square Super Seller - I'm here to help!

Fattoad · ‎01-04-2019

Thank you so much @pessosices! I just couldn’t wrap my head around the math. Your explanation makes total sense. Thanks for taking time to reply.

pessosices · ‎01-04-2019

It's absolutely my pleasure! Glad I could help!
Yea, it's all super confusing, especially when tax is included - took me a while to figure out whether it was doing the right thing or not too! Glad we worked it out!

Pesso - he/him
Pesso's Ices & Ice Cream
Square Super Seller - I'm here to help!