Three scenarios illustrate charging taxes for time and expenses in BillQuick.
- You are charging individual time entries for the same project at different rates.
- You are charging all time entries for the same project at the same rate.
- You are applying multiple taxes to time entries and the ‘tax is taxed’.
Scenario 1:
You have applied different tax rates to time entries for the same project. Let us assume you have entered 1 hour for each activity and $100 as Bill Rate for each entry.
Time entry with activity A; one tax is charged, Tax 1 = 10 %
Time entry with activity B; two taxes are charged, Tax 1= 20% and Tax 2 = 30%
Time entry with activity C; three taxes are charged, Tax 1 = 10%, Tax 2 = 20% and Tax 3 = 30%
Activity A: 1 hour x $100 x 1.1 = $110
Activity B: 1 hour x $100 x (1.2 + 0.3) = $150
Activity C: 1 hour x $100 x (1.1 + 0.2 + 0.3) = $160
The resulting amount due on the invoice will be $300 service + $120 service tax =$420
Note that when there is more than one tax, BillQuick sums them before applying to the entry.
Scenario 2:
You have taxed all time entries at a single main tax rate for the same project. Let us assume you have entered 3 hours for an activity and $100 as the Bill Rate for each entry.
Main Service Tax= 10 %
Activity: (3 hours x $100) x 1.1 = $330
The resulting amount due on the invoice will be $300 service + $30 Main Service Tax=$330.
Note: BillQuick applies the main tax after computing the total labor amount.
Scenario 3:
You have applied multiple taxes to time entries and the ‘tax is taxed’ for the same project. Let us combine scenario 1 and 2. The individual time entries are taxed based on the activity (Scenario 1) and then that total amount is taxed (Scenario 2).
Activity A: 1 hour x $100 x 1.1 = $110
Activity B: 1 hour x $100 x (1.2 + 0.3) = $150
Activity C: 1 hour x $100 x (1.1 + 0.2 + 0.3) = $160
The resulting amount due on the invoice will be $300 service + $120 service tax =$420
Total Service + 10% MST: $420 x 1.1 = $462
The resulting total amount due on the invoice will be $462.
Similarly, these scenarios apply to expense entries made in Expense Log.