Tax-Inclusive Pricing in ERPNext: Tax Included in the Item Rate
Tax-inclusive pricing builds the sales tax into the item’s total price, so the customer pays a single flat amount with the tax already inside it. For example, an item priced at $100 with a 10% tax rate still costs the customer a flat $100 of which $9.10 is the tax collected.
Steps
- In the Sales Taxes and Charges section, open the table view of the tax in question and expand the row.
- Check the Is this Tax included in Basic Rate? checkbox.
The system then back-calculates the tax from the item rate, so the displayed price stays the same while the tax portion is worked out and recorded within it.
NOTE
With this option on, the tax is extracted from the item rate rather than added on top of it. So a $100 item at 10% stays $100 to the customer (with $9.10 as tax), it does not become $110. That’s the key difference from a normal, tax-exclusive charge.
TIP
Use tax-inclusive pricing where customers expect a clean, all-in price retail or over-the-counter sales, for instance. Because the tax is back-calculated, your displayed prices stay round and predictable while the tax is still captured correctly in your accounts.
Related Topics
- Sales Taxes and Charges Template
- Sales Invoice
- Item Price
- Consider Tax or Charge For
SUMMARY
Tax-inclusive pricing incorporates the sales tax into the item’s total price, so the customer pays a flat amount with the tax already inside (a $100 item at 10% stays $100, of which $9.10 is tax). To set it up, expand the relevant tax row in the Sales Taxes and Charges section and check “Is this Tax included in Basic Rate?”. The system then back-calculates the tax from the rate, keeping the displayed price the same while recording the tax portion within it.
