Our tax tracking feature allows you to apply a tax rate and tax amount to each expense.
Covered in this Article:
- Setting up tax tracking
- Setting up tax on Categories
- Applying simple tax to expenses
- Applying complex tax to expenses
- Setting up multiple taxes (GST/PST/QST) on indirect connections
- Exporting tax
Setting up tax tracking
Tax tracking can be enabled in the policy settings for any policy, whether group or individual.
- If your policy is not directly connected to an accounting system, go to Settings > Policies > Group > [Policy Name] > Tax to enable tax.
- If your group policy is connected to Xero, QuickBooks Online or NetSuite, make sure to first enable Tax via the connection configuration page (Settings > Policies > Group > [Policy Name] > Connections > Configure) and then sync the connection. Your tax rates will then be imported.
In the tax settings, you can then:
- Add tax names, rates, and codes. If your company policy is directly connected to an accounting system, then your taxes will instead be imported from this accounting system. (These will be indicated with a logo icon for that accounting system.)
- Enable/disable the taxes you would like to make available to users
- Set a default tax for policy currency expenses and, optionally, another default tax (including exempt) for foreign currency expenses which will automatically apply to all new expenses
Setting up tax on Categories
If a particular policy currency expense type should have a different tax rate to the policy currency or foreign currency defaults set above, head to the Categories page then click Edit Rules next to the relevant category and set the Category default tax which will be applied to new expenses instead of the policy currency default.
Please note: Category default tax will only apply to policy currency expenses and will not apply to foreign currency expenses.
Applying simple tax to expenses
- Once tax tracking has been enabled in the policy, the default taxes for the policy will automatically be added to all expenses
- If the tax on your receipt is different to the default tax, select the appropriate tax from the tax drop down on the web expense editor or the mobile app
- The tax amount will automatically be calculated. If the tax amount on your receipt is different to the calculated amount, manually type in the correct tax amount.
Applying complex tax to expenses
- If different taxes apply to different items on your receipt then use the Split Expense function and apply the correct tax to each part.
- If you don't know the tax inclusive total amount that the tax amount on a receipt applies to, use the following formula to calculate this: (Tax amount x (100 / Tax rate)) + Tax amount.
Setting up multiple taxes (GST/PST/QST) on indirect connections
Expenses sometimes have more than one tax applied to them, for example in Canada expenses can have both a Federal GST and a provincial PST or QST.
Expensify has a special method for handling these which is to create a single tax that combines both taxes into a single effective tax rate.
For example, if you have a GST of 5% and PST of 7%, adding the two tax rates together gives you the effective tax rate of 12%.
Once you have your taxes added to Expensify, you can go ahead and make use of the Multiple Tax Export you'll find under the "Export To" options!
After the report is added to your account, you will be able to select the reports you want to export (from the Reports tab) and then click Export to > Tax Report. Expensify will generate a CSV containing all the expense information including the split out taxes.
Tax information can also be included in the spreadsheet export of your expense reports. Learn more about customized spreadsheet exports on our reports export page.
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