Yes, you can switch between the two models. Changing the pricing model may affect existing invoices or quotes, so review any outstanding transactions before making adjustments.
Set tax-inclusive or tax-exclusive pricing
With Tax Inclusive pricing, the tax is included in the price your customer pays. With Tax Exclusive pricing, the tax is added on top at checkout. Choose the model for your whole organization in Payments > Settings > Taxes, or for a single product while creating or editing it.
What tax-inclusive and tax-exclusive pricing mean
Tax-inclusive pricing shows one total: the price already contains the tax, and that total is what the customer pays. Tax-exclusive pricing shows the price and the tax separately, and the customer pays the sum of both.
With tax-inclusive pricing, the total price shown to the customer stays the same across regions with different tax rates. The tax is calculated at the customer's regional rate, but it is included in the price.
Set the pricing model globally
The global setting applies to every product that follows it. Open Payments > Settings > Taxes and answer the question Include tax in prices with Yes for tax-inclusive pricing or No for tax-exclusive pricing.
Open Payments > Settings > Taxes.
Under Include tax in prices, choose Yes (Tax Inclusive) or No (Tax Exclusive).
If you make no selection at the global level, the default is Tax Exclusive. For help creating tax rates and rules, see the article "Add taxes".
Set the pricing model for a single product
Every product, including products created in the past, defaults to Follow Global settings, and you can change any product to Tax Inclusive or Tax Exclusive while creating or editing it.
Create a new product or open the product you want to change.
Under Include tax in prices, choose Follow Global settings, Tax Inclusive, or Tax Exclusive.
Changing a product to Tax Inclusive or Tax Exclusive unlinks it from the global setting, so global changes no longer affect it. Products left on Follow Global settings change whenever the global setting changes.
Where the tax displays
The tax appears in the order form, in the order details and summary, and in the receipt.
Frequently asked questions
Can I switch between tax-inclusive and tax-exclusive pricing after setting up my pricing?
How does changing my pricing model affect existing subscriptions or recurring payments?
Changing the model can impact existing subscriptions or recurring invoices. You may need to manually adjust existing subscriptions so the correct tax amounts are applied.
What happens if a customer is in a region with a different tax rate and I've set tax-inclusive pricing?
The tax is calculated at the customer's regional rate, but the total price shown to the customer stays the same because the tax is included in the price. You may need to adjust your pricing strategy if you operate in multiple tax jurisdictions.
How are discounts applied when using tax-inclusive pricing?
With tax-inclusive pricing, discounts apply to the total price including taxes, and the final tax is recalculated based on the new total. With tax-exclusive pricing, discounts apply to the base price before taxes.
Can I manually adjust the tax amount on individual invoices?
Yes, you can manually adjust the tax amount on individual invoices. A manual adjustment may not reflect the automated tax rules based on your pricing model or location settings.
Was this helpful?
Was this helpful?