Tax free items

Removing tax from items which are exempt of tax and how this affects invoicing. "My tax is less than 10%"

Dan C avatar
Written by Dan C
Updated over a week ago

How to handle tax free items

When going through an estimate, purchase/work orders or variation there are times that you'll need to add items that are tax exempt.

Handling these is easy, simply click on the tax percent and change that item to have 0% tax using the exempt tax code.

If you don't have this option, you may need to set up your tax profile. More info on that here:

How do tax free estimate items affect my invoicing?

Buildxact works out the tax item by item and then totals it up, meaning that if you're in Australia for example where your tax rate is 10% and you remove the tax from estimate items when budgeting, the total tax will no longer be 10% of the Sub Total amount.

In the example below you can see two items at $1000 each, but only one has tax on it, this means the Sub Total is $2000 but there is only $100 of tax as only one item is contributing to it.
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When we look at the invoicing later in the process, you'll notice again the tax in this example is not 10% of the contract amount. This is because Buildxact essentially takes the invoice percent and works out both the contract amount and the tax amount from it. So in this case:

  • $2000 Sub Total (from above) x 50% = $1000 claim

  • $100 GST (from above) x 50% = $50 GST

Any questions on this, let us know.

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