Expensify’s tax tracking allows you to create tax rates and codes for domestic and foreign currencies and different expense categories. Once you’ve enabled tax tracking, your default tax rate is automatically applied to all expenses.

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Tax Tracking - Connected to an Accounting Integration

If your Workspace is connected to Xero, QuickBooks Online, Sage Intacct, or NetSuite, follow these steps to set up tax tracking:

1. Go to Settings > Workspaces > [Workspace Name] > Connections.
2. Click Configure.
3. Click Sync Connection.

The tax rates are then imported from the accounting system and displayed with the connection’s logo.

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Tax Tracking - Not Connected to an Accounting Integration

If your Workspace is not connected to an accounting system, follow these steps to set up tax tracking:

1. Go to Settings > Workspaces > [Workspace Name] > Tax.
2. Enable the toggle to allow taxes to be added to expenses.
3. Modify the existing tax rate or click New Tax Rate to add a new one. For each tax rate, you can:
   • Enable/turn off individually.
   • Add a specific name for the rate.
   • Enter a percentage value.
   • (Optional) Add a unique tax code.
4. At the top of the screen, enter the name that taxes will appear as on expenses. Then, select the default tax rates for:
   • Expenses submitted under your workspace currency.
   • Foreign currency expenses.

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Track Tax by Expense Category

You can also set tax rates for specific expense categories:

1. Go to Settings > Workspaces > [Workspace Name] > Categories.
2. Click Edit next to the desired category.
3. Click the Default Tax dropdown and select the desired tax rate.

This rate will be applied to all new expenses under this category, overriding the workspace’s default currency tax rate.

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FAQ

How do I set up multiple taxes (GST/PST/QST) for indirect connections?

Expenses sometimes have more than one tax applied to them (for example, in Canada, expenses can have both a Federal GST and a provincial PST or QST).

You can create a new tax rate that combines both into a single rate to handle multiple tax rates. For example, if you have a GST of 5% and PST of 7%, you can add them together and create a new tax rate of 12%.

You can generate a CSV from the Reports page containing all the expense information, including the split-out taxes, by going to the Reports tab, clicking Export To, and selecting Tax Report.

How do I handle the taxes for a receipt that includes more than one tax rate?

If your receipt includes more than one tax rate, there are two ways you can handle the tax rate:

• Many tax authorities do not require reporting tax amounts by rate; therefore, you can apply the highest rate on the receipt and then modify the tax amount on the receipt if necessary. Please check with your tax advisor to determine if this approach suits you.
• Alternatively, you can apply each specific tax rate by splitting the expense by the applicable costs for each rate. To do this, open the expense and click Split Expense. Then, apply the correct tax rate to each.

What if my workspace has multiple tax rates?

You’ll have the option to change the tax rate from within the expense as needed.

What should I do if the tax amount for my expense does not show up, or is it showing as a different amount than what I expected?

In Expensify, tax is inclusive, meaning it’s already part of the total amount shown. If the tax amount doesn’t show up on your receipt or is different from the calculated amount, you can manually type in the correct amount.

To determine the inclusive tax from a total price that already includes tax, you can use the following formula:

Tax amount = (Total price x Tax rate) ÷ (1 + Tax Rate)

For example, if an item costs $100 and the tax rate is 20%: Tax amount = ($100 x .20) ÷ (1 + .20) = $16.67 This means the tax amount of $16.67 is included in the total.

If you are simply trying to calculate the price before tax, you can use the formula:

Price before tax = (Total price) ÷ (1 + Tax rate)