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Why isn't my tax override adding up correctly at checkout?

teemukostamo
Shopify Partner
7 1 5

Hi!

 

I got a store that's registered to collect taxes in Finland. Under Settings -> Taxes & Duties -> European union I've created a product override to collect 14% taxes on applicable products. However, at checkout the tax percentage calculation does not add up.

 

For example, from a total of 50€, 6,14€ taxes is collected. That's 12,28% instead of 14%. The same problem is with products without the tax override. The default tax should be 24%, but from a total of 50€, 9,68€ taxes is collected. That's 19,36%.

 

Am I missing something here? What could be the reason for this behaviour?

 

Thanks in advance for replies!

Accepted Solution (1)

teemukostamo
Shopify Partner
7 1 5

This is an accepted solution.

Turns out the calculation is correct, I just was unclear on how it works. It's explained pretty well here: 

View solution in original post

Replies 2 (2)

TrueProfit_Jen
Shopify Partner
40 1 9

Hello @teemukostamo ,

 

You can check if the tax calculation is being rounded by Shopify. Here's how:

  • Go to admin panel -> Settings -> Taxes
  • Tax rounding -> select the rounding method you want to use (in your case, I suggest you choose "Nearest")
  • Save and test

Hope this can help you out.

Jen from TrueProfit.

TrueProfit - The Ultimate Real-time Profit Tracker For Shopify

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teemukostamo
Shopify Partner
7 1 5

This is an accepted solution.

Turns out the calculation is correct, I just was unclear on how it works. It's explained pretty well here: