Some of the Inventory Items and Service Items in your Clinic, when being billed, may require Taxes to be applied. In order to apply the taxes, you first need to define the Tax Rates.
For Example, You want to add a new Tax, named VAT and apply the Tax rate to a Service Item in your clinic.
Let us have a look at how to create a new Tax:
1. Go to Tools and click on Taxes. A new page open Taxes. Now click on +Add New.
2. A Tax List Item window will open, enter the Tax Name ex: VAT and put the Taxes in percentage ex: 5 %. Click on Save.
3. Once saved, the new tax gets added to your Tax List. And you will automatically be diverted to the Taxes page and the new Tax will appear here.
4. In some cases, you might have additional taxes and surcharges to the Base Tax. Let us define each
Base Tax: This is the flat tax on top of which addon and surcharges are applied.
Add-On Tax: This is the tax that is simply added to the flat rate.
Surcharge: This is the tax that is computed as % on the base tax rate.
Ex: Let us assume that we have to set up Service Tax of 14.64% which comprises of the base tax (14%), additional tax(0.50%) and also a surcharge of 1%.
(a). Go to Tools and click on Taxes. Click on +Add new on the list page.
(b) Now enter the Tax Name and also the Base Tax Rate percent (14%) and toggle the Composite Tax switch to on. Doing this will open additional Tax category box called the Composite Tax.
In Composite Tax, type the name of the Additional name(Ex: Govt. Tax), enter the Tax percentage as (0.50%), select Additional Tax from the Tax As dropdown and Click on +Add.
Enter the name of the Surcharge Tax (Ex: CESS), enter the Surcharge percentage(1%) and Click on +Add.
Ex:12% x 1/100 = .12
You will see the Calculated Tax becomes 14.64% ie (14% + 0.50% + .12%)
5. Now, let us have a look at how to apply the newly added Tax to a Service Item. Ex: apply VAT “ 14% to Gym Session.
Go to Tools and click on Services. Click on the service to Open the Service Item Page. Scroll down to Pricing and click on the Tax drop-down to select the desired tax. Click on save and you are done. Tax has been applied to the Service now and will appear when billed.