To access the tax settings screens, they first need to be enabled.
- Go to: WooCommerce > Settings > General.
- Select the Enable Taxes and Tax Calculations checkbox.
- Save changes.
Configuring Tax Options
To start configuring taxes:
Go to: WooCommerce > Settings > Tax. This tab is only visible if taxes are enabled.
The Tax tab displays several options that can be set to suit your needs — settings you choose are based on the tax jurisdiction under which your store is located.
Prices Entered With Tax
This option is perhaps the most important when managing taxes in your store, as it determines how you input product prices later on.
- “Yes, I will enter prices inclusive of tax” means that all catalog prices are input using your store’s base tax rate.
For example, in the UK you would input prices inclusive of the 20% tax rate e.g. You enter a product price of £9.99 that includes £1.67 tax. A customer in the UK would pay £9.99 as defined, and a customer in the US would only pay £8.32.
- “No, I will enter prices exclusive of tax” would mean that your catalog prices need to be tax exclusive.
Using the example from above, a UK shop would enter 8.32 at the product price. A tax of 20% would be applied on top of this during checkout making the amount payable £9.99.
The tax calculation for tax-inclusive prices is:
tax_amount = price - ( price / ( ( tax_rate_% / 100 ) + 1 ) )
The tax calculation for tax-exclusive prices is:
tax_amount = price * ( tax_rate_% / 100 )
Display Prices in the Shop
This option determines how prices are displayed in your shop/catalog. Choose from Including tax or Excluding tax.
We recommend setting this series of settings to Excluding Tax if prices are entered without tax, or Including Tax if prices are entered including tax.
Settings when prices are inclusive of tax
Settings when prices are exclusive of tax
If any of the 3 tax display settings (Prices entered with tax, Display prices in the shop, Display prices during cart and checkout) differ, a warning banner will appear to notify the user when the tax display settings are mismatched and in conflict. Clicking on “Use recommended settings” should change all the settings to be the same as the one set for “Prices entered with tax”.
Shipping Tax Class
In most setups, shipping tax class is inherited from the item being shipped, e.g., Shipping a reduced rate item such as baby clothes would also use a reduced rate. If this is not the case in your jurisdiction, choose a different tax class.
In the case of multiple tax rates in the order, the shipping tax will be applied as follows:
- If you have a product with the
Standardrate in the order, it will be used for the shipping regardless if this rate is high or low;
- If you don’t have a product with the
Standardrate in the order, then the first rate found in the
Additional tax classsection will be used for shipping.
The goal is to make sure that your highest rate is listed the first in the
Additional tax class section if you don’t use the
Standard class and if you need the highest tax rate to apply to shipping, for example.
Here is a setup to showcase it visually:
Standard class is there by default but
Tax C should be created for each tax class respectively. Note that it is not possible to delete the
Standard tax rate but you can leave it empty and it will be ignored:
Standard rate is empty:
Tax A (24%) – the highest rate listed the first:
Tax B (14%):
Tax C (10%):
In Bus Ticket Booking with Seat Reservation
After setting tax in WooCommerce you will get a tax option in new transport add and edit transport. There are two fields on is Tax Status and another is Tax Class. By Tax Status you can tax none or taxable in individual transport and Tax Class you can set class for individual transport which calculate tax amount as setting tax rate in WooCommerce.