Using the Extracted Amount Calculator
Note: this feature only applies to Hubdoc users in jurisdictions where businesses must track their sales tax paid and have taxes turned on in Hubdoc.
Sometimes the sales tax on an bill or receipt might not reflect a flat application of a single tax rate on the total. Common examples include:
- Restaurant meals, where the subtotal is taxed but the tip is not
- Grocery bills, where some food items are taxed and others are not
In these cases, selecting a single tax rate from the tax rate field will not calculate the correct tax amount.
Good news! Hubdoc has an auto-calculator tool that does some fancy math to calculate the correct line items for you automatically.
Here's how to use it - using this pizza receipt as an example:
- The total amount paid: $229.75
- Tip paid: $29.97
- Taxes: $22.98
1. Select "Extracted Amount" from the tax rate field
2. Enter the relevant fields in the tax rate calculator
When you select Extracted Amount, the tax calculator will appear under the tax extracted amount field next to the calculator robot.
- The Tax Amount field is the actual tax amount paid on the document
- The Taxable Portion field allows you to select the tax code on the taxed amount of the document.
- The Untaxed Portion field relates to the amount of the total that taxes are not applied to. This amount in most cases will remain “Exempt 0%” but sometimes other tax codes can also be selected.
- The Account field indicates which Chart of Account is applied to the Taxed and Untaxed amounts.
3. Click "Generate Line Items"
Click “Generate Line Items” to see the tax amount calculations. The auto-calculator will do the math to figure out what the taxable and untaxed line items should be.
You can edit the line items from this window.
NOTE: Due to rounding, the line items calculated may differ from the document by a penny or two. These can be adjusted in the line items window that appears.
4. Click Save & Close
- If the receipt has more than two tax codes you can create additional tax lines by clicking “Add a new line”.
- If you would rather enter the line items manually, click the "Or Enter Manually" link next to the blue Generate Line Items button and enter the line items yourself
- If you select Extracted Amount as your tax rate, you cannot publish a single line item (because there is no way to make the tax rates match using only one line item). If you want to publish a single line item, change the Tax Rate field to a different rate.