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Tax, service charge & tips

Set the branch VAT rate, give individual items their own tax profile, add a service charge, and follow exactly how a total is assembled.

7 min readOwnerAccountant

The branch VAT rate

Dashboard → Settings → Tax & charges

  1. Open Dashboard → Settings.

  2. Enter the VAT rate (%) — for example 16.

    This is the default applied to any line whose item has no tax profile of its own.

  3. Enter the Service charge (%) if you levy one.

    Restaurants commonly use 10; retail branches normally leave it at 0.

  4. Click Save changes.

    New rates apply to orders placed from now on. Past orders keep the rates they were sold under.

Tax rates for mixed baskets

Dashboard → Tax Rates

Some goods are zero-rated or exempt while the rest of your basket is standard-rated. Create the rates you need once, then attach the right one to each item.

  1. Open Dashboard → Tax Rates and click New tax rate.

  2. Enter a Name and a Rate (%).

    For example Zero-rated at 0, or Standard VAT at 16.

  3. Mark one as Default if you want it pre-selected.

  4. Click Create.

  5. Open an inventory item and set its Tax profile to that rate.

    Items left on Branch default fall back to the branch VAT rate, so you only have to touch the exceptions.

Tax is worked out per line, not on the bill

Each line is taxed at its own rate on its own discounted amount, then the line taxes are added. A basket of standard-rated and zero-rated goods comes out correct without splitting it into two sales.

How a total is assembled

How a total is assembled, in orderyesnoLine subtotals(price + variant delta) ×quantitySubtract the discountCode, or the bestauto-apply ruleDoes the item carry atax profile?Use the item's own rateUse the branch VAT rateAdd tax, per line, onthe discounted amountAdd the service chargeBranch rate on thediscounted subtotalAdd the tipUntaxedSubtract loyalty pointsredeemedNever below zeroTotal payable

Order matters: the discount comes off before tax is worked out, so a discount reduces the VAT you owe. A loyalty credit is applied after tax, so it does not.

Read this diagram as text
  • Line subtotals → Subtract the discount
  • Subtract the discount → Does the item carry a tax profile?
  • Does the item carry a tax profile? → Use the item's own rate (yes)
  • Does the item carry a tax profile? → Use the branch VAT rate (no)
  • Use the item's own rate → Add tax, per line, on the discounted amount
  • Use the branch VAT rate → Add tax, per line, on the discounted amount
  • Add tax, per line, on the discounted amount → Add the service charge
  • Add the service charge → Add the tip
  • Add the tip → Subtract loyalty points redeemed
  • Subtract loyalty points redeemed → Total payable

Two consequences worth knowing. A discount reduces the tax you owe, because tax is charged on the discounted amount. A loyalty redemption does not — it is a payment against the bill, so the tax you collected stays the tax you declare.

A worked example

StepFigure
Subtotal2,000.00
10% discount code−200.00
VAT at 16% on 1,800+288.00
Service charge 10% on 1,800+180.00
Tip+100.00
Loyalty: 3 points redeemed−300.00
Total payable2,068.00

Tips

A tip is entered in the cart summary and rides on top of the bill. It is shown as its own line on the total, is not taxed, and is not part of the service charge. Because it is part of what the customer actually paid, it turns up in the expected takings at reconciliation.

KRA eTIMS fields

Dashboard → Settings → KRA eTIMS

The branch can store its eTIMS credentials — enable the section, then fill in the branch code, device ID and PIN. Leaving the PIN blank keeps whatever is already stored; entering a value replaces it.

Configuration only

Wezo stores these details but does not yet transmit invoices to KRA. Keep filing through your existing eTIMS process until that changes.