Our tax tracking feature allows you to apply a tax rate and tax amount to each expense. This feature is currently available on Team and Corporate policies.
Covered in this Article:
- Setting up Tax Tracking
- 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 (Admin > [Policy Name] > Tax)
If your policy is connected to Xero, QuickBooks Online or NetSuite enable Tax via the connection configuration page (Admin > [Policy Name] > Connections > Configure)
You can then:
- Add tax names, rates, and codes (if your policy is directly connected to an accounting system then your taxes will instead be imported)
- 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
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 crazy taxes.
The trick is to create a single tax in Expensify that combines the multiple taxes into an effective tax rate.
For example, if you have a GST of 5% and PST of 7%, adding the two tax rates together give you the effective tax rate of 12%.
A slightly more complicated example is that of Quebec's taxes where you have a GST of 5% and a compound QST of 9.975% (compound means the QST is applied to the tax inclusive expense amount after the GST is applied, unlike regular taxes in the first example which is applied to the tax exclusive expense amount). In this case you need to do a little bit of calculating: first, apply the GST to 100 (100 x 1.05 = 105) then apply the QST to the new total (105 x 1.09975 = 115.4738). Remove the expense amount (115.4738 - 100 = 15.4738) and put a % on the end and you have your effective tax rate of 15.4738%
Once you have your taxes added to Expensify, contact us and request that we add the MultipleTaxReport.ftl export template in your account.
Once the report is added to your account, simply select the Reports you want to export 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.