Create Group Tax

To create a group tax rate in QuickBooks Online, you must set up separate groups for sales and purchases. Because these rates are used in transactions, you cannot edit or delete a group tax once it is created; if you make a mistake, you will need to make the old group inactive and create a new one.

Follow these steps to create a group tax rate:

1. Go to Settings (the gear icon) and select Taxes.
2. In the Tax Center, select Add tax or Edit/Add tax (depending on your view).
3. Under the Tax or Sales Tax tab, choose Add a tax.
4. Select A group tax rate and choose Next.
5. Enter a Name for the group (for example, “Excise Duty 12% + Cess”).
6. Select the Single tax rate components to include in the group. Ensure you choose rates that match the transaction type (Sales or Purchase) you are setting up.
7. Select the calculation method for the subsequent rates:
   • Net Amount: Calculates tax on the original amount only.
   • Tax Amount: Calculates tax on the amount of the previous tax rate.
   • Net + Tax: Calculates tax on the sum of the original amount and the previous tax.
8. If you need to include more than two rates, select Add another rate and repeat the selection and calculation steps.
9. Select Save.