Payment Plan Tax Calculations

There are a few settings you can configure when using taxes on payment plans.

Round Taxes At Payment Plan Level

This setting determines how taxes are calculated for payment plans. It allows the calculation of taxes at the payment plan level, combining the taxable amounts on the individual orders of the payment plan. Check the check box to calculate taxes at the payment plan level. Uncheck the check box to calculate taxes at the order level.

This setting basically groups the tax totals at the payment plan level rather than the order level, which eliminates small discrepancies due to order level rounding.

For example:

2 orders with a 7.5% tax for $1.00. Each order calculates to $1.08 due to rounding. This causes the payment plan to recognize that there is $1.15 in tax when the two orders are consolidated onto a single payment plan, rather than $1.16.

Recalculate Payment Plan Taxes Based On Issue Date

Best practise is to enable this setting if your organization is subject to a tax rate change. For example, when the tax authorities define that the new tax rate is effective as of a certain date, without any effect on the previous invoiced payment steps (without adjusting the previous invoices raised with the old tax rate).

Similar to the Round Taxes at Payment Plan Level setting, it allows the calculation of taxes at the payment plan level, combining the taxable amounts on the individual orders of the payment plan. Check the check box to calculate taxes across all orders on the payment plan to avoid minor rounding issues that can occur due to order level rounding. Uncheck the check box to calculate the payment plan taxes based on the individual order taxes.

This setting actually causes the tax to recalculate based on the percentage tax in effect on the issue date of the payment plan step. It typically results in the same effect as the Round Taxes at Payment Plan Level setting, but with the additional feature of using the different rate.

The tax recalculation takes place at the issue date change of the payment plan step. It does not occur on service orders not connected to a payment plan.

Configure the Tax Settings

To configure these settings:

1. Click the Tax Configuration link from the Main Menu. The Tax Configuration screen opens.
2. Expand the Payment Plans section.
3. Check (enable) or uncheck (disable) the Round Taxes At Payment Plan Level and Recalculate Payment Plan Taxes Based on Issued Date check box based on your desired behavior.
4. Click OK.