Showing Tax in WooCommerce Checkout: A Beginner’s Guide
Taxes! The inevitable part of selling anything. Setting them up correctly in your WooCommerce store is crucial for compliance, transparency, and a positive customer experience. This guide walks you through how to configure WooCommerce to correctly display tax in your checkout process, even if you’re a complete newbie.
Imagine you’re selling handcrafted candles online. A customer loves your Lavender Bliss candle and adds it to their cart. They proceed to checkout, expecting to pay the listed price of $15. But suddenly, BAM! A mysterious extra charge appears – the tax. If it wasn’t clearly explained, your customer might feel surprised, confused, and even abandoned their cart. We don’t want that!
Why is Showing Tax in Checkout Important?
Beyond avoiding customer cart abandonment, displaying taxes clearly is vital for several reasons:
- Transparency and Trust: Showing the tax breakdown builds trust with your customers. They know exactly what they’re paying Explore this article on How To Customize The Woocommerce Email Header for.
- Compliance with Laws: In most regions, legally, you’re required to display taxes on your invoices and at the point of sale.
- Accurate Accounting: Properly displaying taxes allows WooCommerce to calculate and report on your sales tax liability accurately.
- Prices entered with tax: This decides whether you enter your product prices *including* tax or *excluding* tax. This choice depends on your local regulations and business preferences. If you include tax in the price, you’ll show the total price to the customer. If you exclude tax, the tax will be added on top of the price at checkout.
- Calculate tax based on: Determines the address used to calculate tax rates:
- Customer shipping address: Tax is calculated based on where the customer is having the product shipped. This is the most common option.
- Customer billing address: Tax is calculated based on the customer’s billing address.
- Shop base address: Tax is calculated based on your store’s address. This is less common, unless you are only selling locally or your tax laws require it.
- Shipping tax class: Read more about How To Remove Review Section From Woocommerce This determines which tax class applies to shipping costs. Usually, you would use the same tax class as your standard products.
- Rounding: This controls whether tax amounts are rounded at the subtotal level or at each line item. Generally, leaving this option enabled is recommended.
- Additional tax classes: Allows you to define additional tax classes for specific product categories (e.g., “Reduced Rate” for certain food items).
- Display prices in the shop: Choose whether prices are displayed including Read more about How To Setup Woocommerce For A Client or excluding tax on your product pages.
- Display prices during cart and checkout: This is the setting we’ll focus on next! It controls how tax is displayed specifically during the cart and checkout process.
- Including tax: Select this if you want to show the total price (including tax) during the cart and checkout process.
- Excluding tax: Select this if you want to show the price without tax, and then add the tax as a separate line item during the cart and checkout process.
- If you’re in Europe (or other regions where VAT is commonly included in prices): Displaying prices *including tax* is often preferred, as it aligns with customer expectations. Using the “Price display suffix” and set it to “incl. VAT” may be a good idea to ensure that customers from outside the EU are also informed about the fact that the shown prices include VAT.
- If you’re in the US (or other regions where sales tax is added on top): Displaying prices *excluding tax* and then adding the tax at checkout is the more common practice.
- Subtotal: $20.00
- Sales Tax (6%): $1.20
- Total: $21.20
- Incorrect Tax Rates: Double-check that you’ve entered your tax rates correctly in WooCommerce > Check out this post: How To Get Add To Cart Button In Woocommerce Settings > Tax > Standard Rates (or other relevant tax class). A typo can throw everything off.
- Caching Issues: If you’re using a caching plugin, clear your cache and see if that resolves the issue. Sometimes, outdated cached data can prevent the correct tax calculations from displaying.
- Conflicting Plugins: Some plugins can Learn more about How To Install Extension In Woocommerce interfere with WooCommerce’s tax calculations. Try temporarily disabling other plugins one by one to see if one is causing the problem.
- Geolocation Issues: If you’re relying on automatic geolocation to determine the customer’s location, ensure that your geolocation service is functioning correctly.
WooCommerce Tax Configuration Basics
Before we dive into the checkout display, let’s quickly cover the foundational settings. Access these settings by navigating to WooCommerce > Settings > Tax.
Here are the key settings you’ll encounter:
Configuring Tax Display in Cart and Checkout
This is the heart of getting tax to show up correctly in the checkout.
1. Go to WooCommerce > Settings > Tax.
2. Look for the section labeled “Display prices during cart and checkout”.
3. You have two choices here:
4. Under the “Price display suffix” setting you can define a text to display next to prices with tax included. This helps the customer to understand if a price include tax or not. For instance, if your product includes tax, you could set a suffix such as “incl. VAT” to indicate to the customer, the shown prices already include the applicable VAT.
5. Click “Save changes”.
Which option should you choose?
This largely depends on your local tax laws and your target audience.
Example Scenario: US-Based Business Selling T-Shirts
Let’s say you’re a US-based business selling t-shirts online. Here’s how you might configure your tax settings:
1. Prices entered with tax: *Excluding tax* (You’ll likely want to enter the price of the t-shirt *without* sales tax included).
2. Calculate tax based on: *Customer shipping address* (Sales tax rates vary by state and even city, so calculating based on the shipping address is most accurate).
3. Display prices in the shop: *Excluding tax* (Show the price of the t-shirt without sales tax on your product pages).
4. Display prices during cart and checkout: *Excluding tax* (Show the price of the t-shirt without sales tax in the cart and at checkout, then add the sales tax as a separate line item).
In this scenario, a $20 t-shirt will show as $20 on the product page. When the customer adds it to their cart and enters their shipping address, the applicable sales tax (e.g., 6%) will be calculated and added as a separate line item:
Troubleshooting Tax Display Issues
Sometimes, tax might not appear correctly in the checkout, even after configuring the settings. Here are a few common causes and solutions:
Advanced Customization (For Developers)
If you need highly specific tax display customization, you might need to use code. For example, you might want to change the way the tax is formatted or display additional information. Here’s an example of how to filter the displayed tax label:
add_filter( 'woocommerce_cart_tax_totals_tax_label', 'customize_tax_label', 10, 2 );
function customize_tax_label( $label, $tax_code ) {
if ( $tax_code == ‘VAT’ ) {
$label = ‘Value Added Tax (VAT)’;
}
return $label;
}
This code snippet changes the tax label from “VAT” to “Value Added Tax (VAT)” in the checkout. You’ll need to add this code to your theme’s `functions.php` file or a custom plugin.
Disclaimer: Customizing code requires some programming knowledge. If you’re not comfortable with PHP, consider hiring a developer to assist you.
Conclusion
Getting tax configured correctly in WooCommerce is essential for compliance and a positive customer experience. By carefully configuring the settings in WooCommerce > Settings > Tax and testing thoroughly, you can ensure that tax is displayed accurately and transparently during the checkout process, leading to happier customers and a more successful online store. Remember to always consult with a tax professional to ensure you comply with all applicable tax laws in your region.
