Tax rate problem


Just checking out Manager - great looking software so far, by the way - but have a question about tax codes. I’ve looked through other threads here with similar questions, but couldn’t find an answer.

I’ve set up a very simple system to test with, basic chart of accounts using the default “Sales” account. I’ve set up a tax code for state tax (I’m in the U.S.) at 6%. I want the tax on the amount entered in Sales displayed in the tax code field.

The system is calculating the tax amount, but it is incorrect for this instance. Instead of calculating at 6%, it seems to be calculating at 5.66%. For instance, if I enter a Sales amount of $500.00 the tax amount should be $30.00, but instead it’s showing $28.30.

Currency is set correctly, and I’ve double checked everything I can think of. I’ve removed the tax code and set it up again. Can’t think of anything else that might be causing this. Other than this issue, everything works great. Is this something I’m doing wrong, or not setting up correctly?

Thanks for any help with this, would really like to try this program in a real scenario…


By default, all transactions assume the amounts entered to be tax-inclusive. It means 6% tax on $500 tax-inclusive amount is:

(500 / 106) * 6 = 28.30

The reason for this is that if you make a sale of $500 which appears in your bank account and $500 was subject to 6% tax, this tax is already included in this amount.

When issuing invoices, you can uncheck the checkbox “Amounts are tax inclusive”, then 6% will be added on top of the tax-exclusive amounts.


Hi Lubos,

Thanks for the quick reply. I see what you’re saying about the way it’s calculated.

The thing is over here (in many small businesses), they take in a given amount for both taxable and non-taxable goods, which are differentiated of course. At the end of the day, they have a gross amount (including sales tax) from the till for taxable sales. They’d like to be able to simply enter that gross amount, have it calculate the sales tax from that amount, deduct it, and give a net deposit amount. And of course the calculated tax amount would be a liability.

I’ll try working with the “Amounts are tax inclusive” option and see what I can come up with. Thanks again for the reply, this looks like an excellent program for small business people with no accounting experience to work with. One of the problems is always getting people out the “cigar box and calculator” mindset and into a more structured approach to managing their data…