Product Category Tax Setup

Product Category Tax Setup Feature in Workshop Software enables users to efficiently manage tax rates for various product categories. If the Workshop Software account is not integrated with an accounting system, tax rates can be set directly within the platform. However, when integrated with an accounting system, tax groups and rates must be configured within that system, as Workshop Software will automatically sync and mirror the tax information from the accounting platform. This ensures consistency and compliance with tax regulations.  

Setup Guide

Step 1: Configure Tax Settings

  1. Navigate to Settings > Company Settings > Tax Settings > Multiple Taxes Toggle No.
  2. Enter the default Purchase Tax Rate and Sales Tax Rate as required.
Workshop Software product category tax setup showing default purchase tax rate and sales tax rate as required

Step 2: Create Product Category

  1. Navigate to Settings > Company Lists.
  2. Create a new Product Category or edit an existing one.
  3. Assign the appropriate Tax Rate to the category.

⚠️ The tax rate set at the category level will override the default tax rate for any products assigned to that category.

For detailed instructions on setting up Product Groups, refer to the attached link.

https://staging.workshopsoftware.com/knowledge-base/products-jobs/add-a-product-group/

Step 3: Assign Tax Rates to Product Groups

  1. Identify product groups that require a different tax rate.
  2. For example, if the default VAT is 23%, but a reduced VAT of 13.5% applies to maintenance services or labor, create a Product Category specifically for these services.
  3. Assign the appropriate tax rate (e.g., 13.5%) to the category.

⚠️ Note: If a category does not have a tax rate assigned, it will default to the standard tax rate set in Company Settings.

Workshop Software screen showing if a category does not have a tax rate assigned, it will default to the stand...

Step 4: Link Product Group to Category

Create or link a Product Group that will be associated with the category and its respective tax rate.

Workshop Software product category tax setup showing product group to category create or link a product group that will be...

Visual Structure

Category: Auto Electrical   ├── Group: Plugs and Sockets   ├── Group: Alternators   └── Group: Wiring Harnesses

Step 5: Assign Products to Groups and Categories

  • Navigate to the Products List.
  • Create a new product or edit an existing product.
  • Select the Group that the product belongs to.
  • The tax rate will be automatically calculated based on the category’s tax rate.
Workshop Software screen showing the tax rate will be automatically calculated based on the category’s tax rate

Conclusion

The Tax Feature in Workshop Software allows users to apply different tax rates to specific products by linking them to product categories. This feature allows products to be taxed at rates different from the default tax setting, providing flexibility and compliance with tax regulations. By following the steps outlined above, users can effectively manage tax rates and ensure accurate tax calculations on customer invoices.

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