Setup Sales Tax (US Region)
Xero supports three different tax structures
- Static: Where a single rate is applied to the invoice and payable to a single tax agency
Refer Steps: Setup: 1
- ConnectWise Group: Where a (combined) set of tax rates payable to different agencies is set for each invoice.
Refer Steps: Setup: 2a, Setup: 2b
- ConnectWise Tax Line: Where a multiple level tax calculation can be set for each line on an invoice. Each level of the ConnectWise Tax Group (level) is mapped to a specific Xero tax rate.
Refer Steps: Setup 3
Tax Rates Setup
- Click on the Settings > General Settings menu
- Click on Tax Rates
Step 1: [Check] Add Tax Rates for each of your required tax rates as per the ConnectWise setup
Xero will load with default Tax Rates. However tax rates applicable to your use and sales will be required to be added. You will be required to add each tax rates based on your preferred mapping level, Static, Group, Line.
- Click on "New Tax Rate" button at the top of the form
- Enter the Tax Group | TaxCodeXRef based on your preferred selection below
- In the Component Setting, add the Tax Agency Name
- In the Rate (Percentage) enter the Percentage of the tax component as a whole number.
To add additional Components for multi-structured taxes, press the Add a Component button, and repeat steps 3 & 4
- Press Save
Step 2a: Create a Single Tax Rate
Click > + New Tax Rate button at the top of the form on the right of the Tax Rates Page.
Step 1: Create (or Edit) a Tax Rate.
- Press the "New Tax Rate" button to create a Single Tax Rate
Note: If you already have Tax Rates setup in Xero, then you only need to check the names match between the systems.
- If you require a Multi-Component Tax Rate, press Add a Component refer to Step 2b.
Single: If you only need to pay a single Agency.
Combined: If you need to pay multiple Agencies.
- Set the Xero Tax Rate Display Name to Match against ConnectWise Tax Code Description
Item 1: Enter the Same Name as defined in the ConnectWise Tax Code Description
Item 2: Enter the Rate (as whole units I.e. 15% = 15)
Refer to the ConnectWise Tax Code for the same Tax Rate details:
Item 1: Shows the Description used to map to the Tax Name in Xero
Item 2: Shows the items rates which make up the flat rate of 0.15 (15%)
Note: ConnectWise records the fractional value of the percentage (0.01 = 1%)
- Press Save.
Step 2b: Create a Multi-Component Tax Rate
Multi-Component tax rates provide you with the ability to calculate tax according to each agency payment requirement. In some cases this may include taxes payable to different agency. The requirement for a Multi-Component Tax Rate is that the tax is calculated the same for all products (lines) on an Invoice.
Step 1: Create a New Tax Rate.
- Set the Tax Rate and Match against ConnectWise Tax Code
Item 1: Enter the Same Name as defined in the ConnectWise Tax Code Name
Item 2: Enter the Rate for each Component (as whole units I.e. 2% = 2)
Refer to the ConnectWise Tax Code for the same Tax Rate: