I have set up taxes on my store and also have include taxes in total. However, when I go to check out, I do not think it is adding the tax. For example: T-shirt is priced at 20 through shopify, when put in cart and checking out, it says tax is included but the total is still 20. Can someone assist me? I just want to make sure my taxes are actually being paid by customers.
If you have enabled the option that includes taxes in the prices of your products, whatever prices you set for your products will be the tax-inclusive price. As an example, if you're in the United Kingdom where taxes are included in the price of the product and the rate of VAT is 20%, a £20 product would be broken down as having a pre-tax cost of £16.67. This is because 20% of £16.67 is £3.33, which added together equals the price of £20.
However, if you are based in a country (e.g. Canada) where listed prices generally do not include tax, you can disable the aforementioned option in your tax settings and have sales tax added onto the prices of your products at checkout. This means you are showing tax-exclusive prices on your store. As an example, if there is a $20 CAD product and the rate of tax the customer is due to pay is 13%, they would pay $22.60 CAD in total. This is because 13% of $20 CAD is $2.60 CAD, and as taxes are not included in the price of a product, this tax total must be added to the price of the product at checkout.
It's also worth noting that irrespective of whether you have taxes included in the price of the products or not, any tax paid by the customer will be shown to them when they are placing their order and will also be viewable to the merchant when they are viewing the order in the Shopify admin.
I hope this explains things, but if you're still having trouble please let me know which country you are based in and I'll be happy to offer further guidance.
Victor | Shopify Social Care