Service Charge Tax Calculation
Introduction
This article provides advanced information about tax calculation on orders that include service charges. See Service Charges and Tips for basic information on service charges.
Important Details
-
Service charge is calculated on top of tax-inclusive item price for tax-inclusive markets, and on top of tax-exclusive price for tax-exclusive markets.
-
When the service charge tax type is Apportioned, the base item price is increased by the service charge amount (after tax for tax-inclusive markets, before tax for tax-exclusive markets) in order to inherit the tax of the items in the account proportionally.
-
The calculation of the total follows the following formula regardless of whether the calculation is for a tax-exclusive or tax-inclusive environment:
-
Untaxed service charge: Item prices with tax + service charge
-
Tax-apportioned service charge: Sum of item prices with tax (because item price already includes service charge)
Example Calculations
| Example 1 | Example 2 | Example 3 | Example 4 | |
|---|---|---|---|---|
| Tax type | Tax-inclusive | Tax-inclusive | Tax-exclusive | Tax-exclusive |
| Service charge type | Untaxed | Tax-apportioned | Untaxed | Tax-apportioned |
| Service charge % | 10% | 10% | 10% | 10% |
| Item 1 tax rate | 7% | 7% | 7% | 7% |
| Item 2 tax rate | 19% | 19% | 19% | 19% |
| Item 1 price | €10.00 | €10.00 | $10.00 | $10.00 |
| Item 2 price | €20.00 | €20.00 | $20.00 | $20.00 |
| Item 1 price with tax | €10.00 | €11.00 | €10.70 | €11.77 |
| Item 2 price with tax | €20.00 | €22.00 | €23.80 | €26.18 |
| Item 1 pre-tax price | €9.35 | €10.28 | $10.00 | $10.00 |
| Item 2 pre-tax price | €16.81 | €18.49 | $20.00 | $20.00 |
| Item 1 service charge contribution | €1.00 | €1.00 | $1.00 | $1.00 |
| Item 2 service charge contribution | €2.00 | €2.00 | $2.00 | $2.00 |
| Item 1 tax (including service) | €0.65 | €0.72 | $0.70 | $0.77 |
| Item 2 tax (including service) | €3.19 | €3.51 | $3.80 | $4.18 |
| tax_total | €3.85 | €4.23 | $4.50 | $4.95 |
| service_charge | €3.00 | €3.00 | $3.00 | $3.00 |
| sub_total | €26.15 | €28.77 | $30.00 | $30.00 |
| total | €33.00 | €33.00 | $37.50 | $37.95 |
Example Financial API Data - Tax Inclusive Account
- Untaxed Service Charge
- Tax-Apportioned Service Charge
- No Service Charge Added
{
"accountReference": "DnxmZU38RY28dHgy4W__Qw==",
"accountFiscId": "A75074.8",
"receiptId": "R75074.8",
"source": {
"initialAccountId": "A75074.8"
},
"salesLines": [
{
"id": "S75074.15",
"totalNetAmountWithTax": "11.00",
"totalNetAmountWithoutTax": "8.33",
"menuListPrice": "10.00",
"unitCostPrice": "0.00",
"serviceCharge": "1.00",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "1.6667",
"taxCode": "VAT20",
"taxRatePercentage": "20.00",
"taxLines": [
{
"taxId": "41910290874374",
"taxCode": "VAT20",
"taxRate": "1.2",
"taxAmount": "1.666667",
"taxIncluded": true
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "13",
"name": "Burger",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 41910290874411,
"name": "Food"
},
"currency": "GBP",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T15:37:52.326Z",
"deviceId": 75074,
"deviceName": "iPad1"
},
{
"id": "S75074.16",
"totalNetAmountWithTax": "5.50",
"totalNetAmountWithoutTax": "4.17",
"menuListPrice": "5.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.50",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "0.8333",
"taxCode": "VAT20",
"taxRatePercentage": "20.00",
"taxLines": [
{
"taxId": "41910290874374",
"taxCode": "VAT20",
"taxRate": "1.2",
"taxAmount": "0.833333",
"taxIncluded": true
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "14",
"name": "Bagel",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 41910290874411,
"name": "Food"
},
"currency": "GBP",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T15:37:53.464Z",
"deviceId": 75074,
"deviceName": "iPad1"
}
],
"payments": [
{
"code": "CASH",
"description": "Cash",
"paymentMethodId": 41910290874392,
"netAmountWithTax": "16.50",
"currency": "GBP",
"tip": "0.00",
"type": "NORMAL",
"deviceId": 75074,
"deviceName": "iPad1",
"fiscId": "T75074.8",
"uuid": "fryjerL6QAKwrkUcyMenmg==",
"fiscDate": "2023-07-07T15:38:02.841Z"
}
],
"timeOfOpening": "2023-07-07T15:37:49.468Z",
"timeOfCloseAndPaid": "2023-07-07T15:38:02.862Z",
"tableName": "",
"type": "SALE",
"nbCovers": 0.0,
"dineIn": true,
"deviceId": 75074,
"deviceName": "iPad1"
}
{
"accountReference": "dSuCxeCXSk2cKpMV_f6Htw==",
"accountFiscId": "A75074.9",
"receiptId": "R75074.9",
"source": {
"initialAccountId": "A75074.9"
},
"salesLines": [
{
"id": "S75074.17",
"totalNetAmountWithTax": "11.00",
"totalNetAmountWithoutTax": "9.17",
"menuListPrice": "10.00",
"unitCostPrice": "0.00",
"serviceCharge": "1.00",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "1.8333",
"taxCode": "VAT20",
"taxRatePercentage": "20.00",
"taxLines": [
{
"taxId": "41910290874374",
"taxCode": "VAT20",
"taxRate": "1.2",
"taxAmount": "1.833333",
"taxIncluded": true
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "13",
"name": "Burger",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 41910290874411,
"name": "Food"
},
"currency": "GBP",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T15:38:08.707Z",
"deviceId": 75074,
"deviceName": "iPad1"
},
{
"id": "S75074.18",
"totalNetAmountWithTax": "5.50",
"totalNetAmountWithoutTax": "4.58",
"menuListPrice": "5.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.50",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "0.9167",
"taxCode": "VAT20",
"taxRatePercentage": "20.00",
"taxLines": [
{
"taxId": "41910290874374",
"taxCode": "VAT20",
"taxRate": "1.2",
"taxAmount": "0.916667",
"taxIncluded": true
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "14",
"name": "Bagel",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 41910290874411,
"name": "Food"
},
"currency": "GBP",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T15:38:09.265Z",
"deviceId": 75074,
"deviceName": "iPad1"
}
],
"payments": [
{
"code": "CASH",
"description": "Cash",
"paymentMethodId": 41910290874392,
"netAmountWithTax": "16.50",
"currency": "GBP",
"tip": "0.00",
"type": "NORMAL",
"deviceId": 75074,
"deviceName": "iPad1",
"fiscId": "T75074.9",
"uuid": "_2yeNhJwSuGzRNw2kFcXSQ==",
"fiscDate": "2023-07-07T15:38:50.565Z"
}
],
"timeOfOpening": "2023-07-07T15:38:07.609Z",
"timeOfCloseAndPaid": "2023-07-07T15:38:50.575Z",
"tableName": "",
"type": "SALE",
"nbCovers": 0.0,
"dineIn": true,
"deviceId": 75074,
"deviceName": "iPad1"
}
{
"accountReference": "tgSoga7dT-uEsZtQ_W_TuQ==",
"accountFiscId": "A75074.5",
"receiptId": "R75074.5",
"source": {
"initialAccountId": "A75074.5"
},
"salesLines": [
{
"id": "S75074.9",
"totalNetAmountWithTax": "10.00",
"totalNetAmountWithoutTax": "8.33",
"menuListPrice": "10.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.00",
"discountAmount": "0.00",
"taxAmount": "1.6667",
"taxCode": "VAT20",
"taxRatePercentage": "20.00",
"taxLines": [
{
"taxId": "41910290874374",
"taxCode": "VAT20",
"taxRate": "1.2",
"taxAmount": "1.666667",
"taxIncluded": true
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "13",
"name": "Burger",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 41910290874411,
"name": "Food"
},
"currency": "GBP",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T15:22:31.399Z",
"deviceId": 75074,
"deviceName": "iPad1"
},
{
"id": "S75074.10",
"totalNetAmountWithTax": "5.00",
"totalNetAmountWithoutTax": "4.17",
"menuListPrice": "5.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.00",
"discountAmount": "0.00",
"taxAmount": "0.8333",
"taxCode": "VAT20",
"taxRatePercentage": "20.00",
"taxLines": [
{
"taxId": "41910290874374",
"taxCode": "VAT20",
"taxRate": "1.2",
"taxAmount": "0.833333",
"taxIncluded": true
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "14",
"name": "Bagel",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 41910290874411,
"name": "Food"
},
"currency": "GBP",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T15:22:32.46Z",
"deviceId": 75074,
"deviceName": "iPad1"
}
],
"payments": [
{
"code": "CASH",
"description": "Cash",
"paymentMethodId": 41910290874392,
"netAmountWithTax": "15.00",
"currency": "GBP",
"tip": "0.00",
"type": "NORMAL",
"deviceId": 75074,
"deviceName": "iPad1",
"fiscId": "T75074.5",
"uuid": "aPqZN9SLRfOSfQCwtakbZw==",
"fiscDate": "2023-07-07T15:23:12.284Z"
}
],
"timeOfOpening": "2023-07-07T15:22:21.679Z",
"timeOfCloseAndPaid": "2023-07-07T15:23:12.304Z",
"tableName": "",
"type": "SALE",
"nbCovers": 0.0,
"dineIn": true,
"deviceId": 75074,
"deviceName": "iPad1"
}
Example Financial API Data - Tax Exclusive Account
- Untaxed Service Charge
- Tax-Apportioned Service Charge
- No Service Charge Added
{
"accountReference": "wwRUIsxdTzqeO_m38KoV3w==",
"accountFiscId": "A75125.3",
"receiptId": "R75125.3",
"source": {
"initialAccountId": "A75125.3"
},
"salesLines": [
{
"id": "S75125.5",
"totalNetAmountWithTax": "11.00",
"totalNetAmountWithoutTax": "10.00",
"menuListPrice": "10.00",
"unitCostPrice": "0.00",
"serviceCharge": "1.00",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "1.4975",
"taxCode": "MULTI",
"taxRatePercentage": "14.98",
"taxLines": [
{
"taxId": "141948669132806",
"taxCode": "GST5",
"taxRate": "1.05",
"taxAmount": "0.5",
"taxIncluded": false
},
{
"taxId": "141948669132805",
"taxCode": "PST9_975",
"taxRate": "1.09975",
"taxAmount": "0.9975",
"taxIncluded": false
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "52",
"name": "Hamburger",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 141948669132845,
"name": "Food"
},
"currency": "CAD",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T22:46:21.913Z",
"deviceId": 75125,
"deviceName": "iPad9"
},
{
"id": "S75125.6",
"totalNetAmountWithTax": "5.50",
"totalNetAmountWithoutTax": "5.00",
"menuListPrice": "5.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.50",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "0.7488",
"taxCode": "MULTI",
"taxRatePercentage": "14.98",
"taxLines": [
{
"taxId": "141948669132806",
"taxCode": "GST5",
"taxRate": "1.05",
"taxAmount": "0.25",
"taxIncluded": false
},
{
"taxId": "141948669132805",
"taxCode": "PST9_975",
"taxRate": "1.09975",
"taxAmount": "0.49875",
"taxIncluded": false
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "FT1",
"name": "Bagel",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 141948669132845,
"name": "Food"
},
"currency": "CAD",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T22:46:22.509Z",
"deviceId": 75125,
"deviceName": "iPad9"
}
],
"payments": [
{
"code": "CASH",
"description": "Cash",
"paymentMethodId": 141948669132824,
"netAmountWithTax": "18.75",
"currency": "CAD",
"tip": "0.00",
"type": "NORMAL",
"deviceId": 75125,
"deviceName": "iPad9",
"fiscId": "T75125.3",
"uuid": "0nklrXGuQmuWVA8bTywGvQ==",
"fiscDate": "2023-07-07T22:46:41.055Z"
}
],
"timeOfOpening": "2023-07-07T22:44:54.199Z",
"timeOfCloseAndPaid": "2023-07-07T22:46:41.067Z",
"tableName": "",
"type": "SALE",
"nbCovers": 0.0,
"dineIn": true,
"deviceId": 75125,
"deviceName": "iPad9"
}
{
"accountReference": "SsrLOlp6SuOIndQ-NOaJUw==",
"accountFiscId": "A75125.4",
"receiptId": "R75125.4",
"source": {
"initialAccountId": "A75125.4"
},
"salesLines": [
{
"id": "S75125.7",
"totalNetAmountWithTax": "11.00",
"totalNetAmountWithoutTax": "11.00",
"menuListPrice": "10.00",
"unitCostPrice": "0.00",
"serviceCharge": "1.00",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "1.6472",
"taxCode": "MULTI",
"taxRatePercentage": "14.98",
"taxLines": [
{
"taxId": "141948669132806",
"taxCode": "GST5",
"taxRate": "1.05",
"taxAmount": "0.55",
"taxIncluded": false
},
{
"taxId": "141948669132805",
"taxCode": "PST9_975",
"taxRate": "1.09975",
"taxAmount": "1.09725",
"taxIncluded": false
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "52",
"name": "Hamburger",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 141948669132845,
"name": "Food"
},
"currency": "CAD",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T22:50:51.275Z",
"deviceId": 75125,
"deviceName": "iPad9"
},
{
"id": "S75125.8",
"totalNetAmountWithTax": "5.50",
"totalNetAmountWithoutTax": "5.50",
"menuListPrice": "5.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.50",
"serviceChargeRate": "10.00",
"discountAmount": "0.00",
"taxAmount": "0.8236",
"taxCode": "MULTI",
"taxRatePercentage": "14.98",
"taxLines": [
{
"taxId": "141948669132806",
"taxCode": "GST5",
"taxRate": "1.05",
"taxAmount": "0.275",
"taxIncluded": false
},
{
"taxId": "141948669132805",
"taxCode": "PST9_975",
"taxRate": "1.09975",
"taxAmount": "0.548625",
"taxIncluded": false
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "FT1",
"name": "Bagel",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 141948669132845,
"name": "Food"
},
"currency": "CAD",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T22:50:51.778Z",
"deviceId": 75125,
"deviceName": "iPad9"
}
],
"payments": [
{
"code": "CASH",
"description": "Cash",
"paymentMethodId": 141948669132824,
"netAmountWithTax": "18.98",
"currency": "CAD",
"tip": "0.00",
"type": "NORMAL",
"deviceId": 75125,
"deviceName": "iPad9",
"fiscId": "T75125.4",
"uuid": "4gbyakwjSPuZkXO1QeJTyA==",
"fiscDate": "2023-07-07T22:51:11.952Z"
}
],
"timeOfOpening": "2023-07-07T22:46:41.506Z",
"timeOfCloseAndPaid": "2023-07-07T22:51:11.973Z",
"tableName": "",
"type": "SALE",
"nbCovers": 0.0,
"dineIn": true,
"deviceId": 75125,
"deviceName": "iPad9"
}
{
"accountReference": "XAIEDpOqSpq7ByOeo520Ag==",
"accountFiscId": "A75125.2",
"receiptId": "R75125.2",
"source": {
"initialAccountId": "A75125.2"
},
"salesLines": [
{
"id": "S75125.3",
"totalNetAmountWithTax": "10.00",
"totalNetAmountWithoutTax": "10.00",
"menuListPrice": "10.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.00",
"discountAmount": "0.00",
"taxAmount": "1.4975",
"taxCode": "MULTI",
"taxRatePercentage": "14.98",
"taxLines": [
{
"taxId": "141948669132806",
"taxCode": "GST5",
"taxRate": "1.05",
"taxAmount": "0.5",
"taxIncluded": false
},
{
"taxId": "141948669132805",
"taxCode": "PST9_975",
"taxRate": "1.09975",
"taxAmount": "0.9975",
"taxIncluded": false
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "52",
"name": "Hamburger",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 141948669132845,
"name": "Food"
},
"currency": "CAD",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T22:44:37.124Z",
"deviceId": 75125,
"deviceName": "iPad9"
},
{
"id": "S75125.4",
"totalNetAmountWithTax": "5.00",
"totalNetAmountWithoutTax": "5.00",
"menuListPrice": "5.00",
"unitCostPrice": "0.00",
"serviceCharge": "0.00",
"discountAmount": "0.00",
"taxAmount": "0.7488",
"taxCode": "MULTI",
"taxRatePercentage": "14.98",
"taxLines": [
{
"taxId": "141948669132806",
"taxCode": "GST5",
"taxRate": "1.05",
"taxAmount": "0.25",
"taxIncluded": false
},
{
"taxId": "141948669132805",
"taxCode": "PST9_975",
"taxRate": "1.09975",
"taxAmount": "0.49875",
"taxIncluded": false
}
],
"accountDiscountAmount": "0.00",
"totalDiscountAmount": "0.00",
"sku": "FT1",
"name": "Bagel",
"statisticGroup": "Food",
"quantity": "1.000",
"accountingGroup": {
"accountingGroupId": 141948669132845,
"name": "Food"
},
"currency": "CAD",
"tags": [],
"categories": [
{
"category": "default",
"value": "Food"
}
],
"timeOfSale": "2023-07-07T22:44:38.241Z",
"deviceId": 75125,
"deviceName": "iPad9"
}
],
"payments": [
{
"code": "CASH",
"description": "Cash",
"paymentMethodId": 141948669132824,
"netAmountWithTax": "17.25",
"currency": "CAD",
"tip": "0.00",
"type": "NORMAL",
"deviceId": 75125,
"deviceName": "iPad9",
"fiscId": "T75125.2",
"uuid": "nRb0J4vuSfO1k1j83XaWMQ==",
"fiscDate": "2023-07-07T22:44:53.745Z"
}
],
"timeOfOpening": "2023-07-07T22:44:35.162Z",
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}