If you’re working with a self-hosted WordPress site and are looking for e-commerce options, I highly recommend WooCommerce . There are many tutorials and guides to usingWooCommerce and I hope this one can be used to supplement these other rich resources. Maybe you’ve dabbled withWooCommerce a bit and need a few questions answered. Or maybe you’re totally new and want a bit of a head start on the more complicated features. Either way, learning about taxes in Woocommerce can help you about a lot of headache.
Taxes in WooCommerce are, for whatever reason, one of the trickiest parts of setting up the program. I find other resources about taxes in WooCommerce very vague and confusing. It took a lot of trial and error for me to set it up properly. WooCommerce is a fairly self-explanatory plugin, but some things can be a little tricky to figure out. Please remember to comment below with any questions about adjusting taxes in WooCommerce – I’m going to be continually updating this post to answer any and all questions that come my way.
Let’s dig in!
How I Set Up Taxes in Woocommerce
I struggled with getting this right a lot and I still tend to mess up. There are many factors in calculating the right tax for you, depending on what you sell, where you sell from, etc. Here’s a step by step for helping you establish basic, standard tax settings.
Go to WooCommerce in your WP Dashboard and select Settings. On the General tab, make sure that “Enable taxes and tax calculations” is selected. Once selected, you’ll have a Tax tab. On this page, you can edit your tax options. Here is where things get tricky. I’m going to go through setting up basic taxes, nothing fancy.
Prices Entered with Tax
You can bypass calculating tax altogether by entering prices inclusive of tax. This means that if you charge $1 for a product and your tax is 6%, you will enter the price of the product as $1.06. If you want to do this, select “Yes, I will enter prices inclusive of tax”. Otherwise, choose “No, I will enter prices exclusive of tax”.
Calculate Tax Based On
This means you can calculate the tax either based on your location, the shipping address of the customer, or the billing address of the customer. If tax, where you live, is 6%, choosing the first option will mean all tax is 6% and so on.
I recommend leaving the Rounding and Addition Tax Classes blank.
Next you have a dropdown for how you display prices in the shop. “Excluding Tax” means that the $1 item will show as $1 as the customer is looking through your shop. “Including Tax” means they will see the item as $1.06 in the shop.
Then you have the dropdown for showing prices during Cart and Checkout. So there are no surprises, you should have this set to “Including Tax” so that the customer can see the final price before going to the payment screen.
Leave Price Display Suffix blank in most cases.
For the Display Tax Totals dropdown, it’s best to have it as a single total. Otherwise, the checkout screen may get messy as it will show the tax for every single individual item as opposed to one total for the amount of tax the customer will have to pay.
Make sure to save all your changes!
Head over to the Standard Rates page, the link to which can be found up at the top.
The asterisks mean that this rate applies to all Countries, States, Zips, and Cities. If you’re setting up basic tax, this is fine. The Rate % in the example is for 6%. Name your tax name Tax or something very basic. It will be priority 1, Compound should be checked and Shipping should be blank.
This example is for a site that charges 6% tax on their products, no matter where you’re buying from. If your state tax is 7% or 9%, the Rate % area should change to reflect that. Aside from that, all your options should be the same as my step-by-step.
Applying Taxes to Products
If you forget this step, you can do everything else perfectly and still not have your taxes working. I went back and forth with a client for ages (embarassing!) and this was the simple solution.
Each product needs to have the proper tax configuration on it’s edit page.
When you create a new product in WooCommerce, make sure that the tax status is set at “Taxable” and the tax class is set to “Standard”. This allows you to have tax on some items and not others if you want to.
And there you have it! Setting up taxes in WooCommerce can be tricky, but not so bad once you know the ins and outs. Please comment below with any questions you have about WooCommerce!