Calculate Tax on a Payable with AS Native Tax

Overview 

Calculating Tax on a Payable with Accounting Seed (AS) Native Tax is different depending upon whether Header Level Posting (HLP) or Line Level Posting (LLP) is enabled. 

Do you want to:

• Calculate Tax on a Payable with Header Level Posting (HLP)
• Calculate Tax on a Payable with Line Level Posting (LLP)

Calculate Tax on a Payable with Header Level Posting (HLP)

With HLP enabled, a Tax Group needs to be selected for each Payable Line. A default Tax Group can also be added to a Product to automatically populate the Payable Line. For more information, refer to the Set up AS Native Tax article.

Note: Under HLP, a Product is not required on the Payable Line for tax calculation. 

1. Navigate to Accounting Home and click the Create Entries tab. Then, under the Expenses menu, click Payables.
2. Display a Payable record.
3. Scroll to the Payable Lines related list to view the available line(s) in the Advanced Line Manager (ALM).
   Note: The Advanced Line Manager (ALM) is only available from the Payable screen if you activated the related Lightning page that was included with the Spring ’24 release. If you are not using the ALM, select a Payable Line and click Edit. Or, create a new Payable Line.
4. Expand the drawer on the Payable Line that you want to calculate taxes.
5. Click the Pencil icon to edit the Tax Group. Then, search for and select the appropriate Tax Group. The Tax Amount will be updated accordingly.
   
   If you are using a Tax Group that has the Tax Inclusive checkbox selected, this checkbox will also be selected on the Payable Line. Additionally, the Combined Tax Rate will populate from the selected Tax Group. The Tax Amount for the line will be based upon the formula below.
   
   Note: In many countries, the Unit Cost is stated with the Tax Amount included. The Tax Inclusive calculation provides a way to “back into” the Tax Amount. The Tax Inclusive calculation is only applicable if you are using Header Level Posting with AS Native Tax.
   
   When using a Tax Group with Tax Inclusive checkbox selected, the formula for calculating taxes is based upon the information below.
   
   Total formula is Quantity X Unit Cost
   
   Sub-Total formula is Total / (divided by) 1 + the Combined Tax Rate
   
   Tax Amount formula is Total – (minus) Sub-Total
   
   In the sample screen below, we used the above calculation formula to back into the Tax Amount of 30.14 by selecting a Tax Inclusive Tax Group and we backed into the Sub-Total for the line, in the amount of 207.86.
   
   Note: Click here to view the above image in full screen. 
   
   Note: When a Payable has cash or credit applied, the Tax Group should not be changed. If an attempt is made to change the Tax Group, a message will display to prevent this action (the message does not expressly mention “Tax Groups”). 
   

Calculate Tax on a Payable with Line Level Posting (LLP)

1. Create a Payable. Then, add and save Payable Lines.
2. Click Calc Tax. The intermediate screen displays.
   Note: If you have the Large Data Optimizer (LDO) feature enabled, refer to the line limit information that relates to clicking the Calc Tax button in the Large Data Optimizer article.
   
3. Click Calc Tax again.  
   Note: A new payable line will be automatically added for each Tax Rate assigned to the account.
   
   Note: Click here to view the above image in full screen.
   
   Each tax line will be the sum of the Tax Rate times the Line Amount across all taxable lines. For example, if the Account Payable had two lines, one taxable for $100 and one non-taxable for $1000, and the Vendor account was set up for Australian GST Tax = 10%, the Account Payable would have three lines:
   • One AP line with the taxable product for $100.
   • One non-taxable AP line for $1000.
   • One purchase tax line for $10.

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Spring '24 Release

Release Notes and Schedule

• The Large Data Optimizer feature is available. For more information, refer to the Large Data Optimizer article.
• The Tax Inclusive calculation is available if you are using Header Level Posting (HLP) with AS Native Tax as your tax method.