Manage Sales Tax Settings for Square Online
Taxes for online sales can be confusing, especially if you receive orders from various locations. With Square Online, setting up and managing your online tax settings has never been easier.
The amount of sales tax charged on an online purchase is determined by applying the tax rate to the total price of taxable items in an order. Depending on business needs, you can include tax in the item price, charge tax on shipping and delivery fees, and use item-level tax rates for collection, local delivery and self-serve orders.
Note: Tax settings from your Square account do not sync to Square Online.
Learn more about other Square Online settings beyond taxes.
Create Tax Rates
Taxes for most countries (except the US and Canada) are charged at the country level only, and must be created manually. The tax rates should be configured based on where the buyer of the goods or services is located.
To create tax rates:
From your Square Online Overview page, go to Settings > Sales Taxes or Shared Settings > Sales Taxes.
Select Add tax rate.
Select a country from the drop-down menu and enter the Country Tax Rate.
Add a name for the tax rate. This will be shown to your customers.
Select Save when finished.
Configure Other Tax Settings
To exempt an item from taxes in Square Online:
- From your Square Online Overview page, go to Items > Site Items.
- Select an item from your list.
- In the Fulfilment section, tick the box to indicate that No taxes apply when selling this item via Square Online or Point of Sale.
- Select Save when finished.
You can also update this setting for multiple items at once using the bulk editing method in Square Online, or for individual items directly from your Square Item Library.
Note: If an item is set as non-taxable, taxes won’t be auto-applied to the item on any orders across Square Online or Square Point of Sale. Make sure that you’ve selected only items that aren’t subject to VAT. For example, in some places, items considered necessities are not taxed. When in doubt, consult a tax advisor.
When VAT is included in item prices, it’s displayed on order receipts as a separate line item (for illustrative purposes), but isn’t added to the total price. To include tax in item prices:
- From your Square Online Overview page, go to Settings > VAT or Shared Settings > VAT.
- Under ‘Order level tax settings’, check that Taxes are included in item prices.
When customers purchase an item with tax included in the price, they’ll see the following on their order receipt:
- Subtotal: Represents the sum price of all items in the order and includes any price inclusive taxes.
- Tax: Breaks the taxes away the subtotal to show customers the exact tax amount paid.
- Total: The total cost of the order, including the subtotal and any additional fees (such as delivery fees) that are applied.
Rules for charging VAT on tax on delivery by courier and local delivery fees vary. If you’re not sure what’s required, you should consult with a professional. To charge VAT on tax on delivery by courier or local delivery fees:
- From your Square Online Overview page, go to Settings > VAT or Shared Settings > VAT.
- Under ‘Order level tax settings’ tick the boxes to Charge taxes on delivery rates or Charge taxes on delivery fees.
Order-level tax rates are applied to online orders by default, but you can choose to override them by applying item level tax rates for collection, delivery and self-serve orders. These are the same tax rates as used for Point of Sale purchases. To turn on item-level taxes for Square Online:
- From your Square Online Overview page, go to Settings > VAT or Shared Settings > VAT.
- Under ‘Item-level tax rates’, toggle on any of the item-level taxes for collection, delivery or self-serve orders.
- Select Manage item-level taxes to view item-level taxes from your Account & Settings page.
Customers who receive an item-level tax rate on an order can view a calculation of their taxes during checkout (displayed by tax name). If a customer selects collection, local delivery or self-serve ordering for an item that doesn’t have an item-level tax rate, no tax will be applied to the purchase.
Note: Sit-in tax rules aren’t applied to online orders.
Troubleshooting
If you don’t see your tax settings appear on your Square Online site, there are a few things to consider that could be the cause:
Taxes are included in your item prices: Be sure the Taxes are included in item prices option isn’t ticked if you don’t want them included.
Items are marked as tax exempt: Update multiple items at once for sales taxes using the bulk editing method.
The website hasn’t been republished: Any time you update tax settings, a good practice is to republish your website from the Square Online site editor.
DISCLAIMER: Although we’ve built a powerful tax calculation system for Square, Square cannot offer any tax advice or consultation services. Tax compliance is your responsibility. We do not guarantee the applicability or accuracy of our tax tools. If you have any questions about your tax obligations, consider consulting a professional tax adviser.