How can I change the way Square rounds when calculating sales tax?

[lipstickconnie]

Apparently Square uses the bankers method for calculating sales tax but my accounting software does not.  The amounts are always a penny or two off.  

Is there a way I can change the setting to calculate the same?

[VanKalkerFarms]

The tax calculation rounding is not something that can be changed.

https://squareup.com/help/us/en/article/5092-rounding

[giantrobotstore]

This reply was created from merging an existing thread: “Sales Tax Rounding isn't consistent - Need Help”

Right now, the Square charges tax inconsistently. 

Right now a $7 item with 9.5% tax is $.665 or .66 so with tax the total is $7.66

a $21 item with 9.5% tax is $1.995 or $1.99, yet Square rounds up here and it's $2 making the total on Square $23 when it should be 22.99

Am I doing something wrong here? Isn't it supposed to round down? 

The problem is, it's not matching my POS system which seems to follow the conventional math I'm displaying. 

thanks. 

[VanKalkerFarms · Accepted solution]

The tax calculation rounding is not something that can be changed. Square uses Banker's rounding or round half to even.

Here is Square's article on rounding. https://squareup.com/help/us/en/article/5092-rounding

and the Wikipedia article on it. https://en.wikipedia.org/wiki/Rounding#Round_half_to_even

[lbduxbury]

The banker's rounding system is throwing off my book keeping. Quickbooks does not function this way, GA tax agencies do not function this way and neither does my accountant.

Why have you set up the taxes this way, it is consitantly crearing discrepencies that hurt my company both financially and administratively. 

THIS NEEDS TO CHANGE ASAP!!!!!!!!!!

[aadams]

So the best answer is "we can't do anything"?  

[metroplexss]

Why won't Square change (or have an option for users to change) from bankers' rounding rules to standard rounding rules? State Comptrollers and most Accounting systems use standard rounding rules. Since Square is most often used for POS transactions, using bankers' rounding seems illogical. We also use Square for payment of invoices whereby the invoices are submitted to accounts payable departments with sales tax figures rounded using standard rules.

[Helen]

This reply was created from merging an existing thread: “Sales Tax Rounding isn't consistent - Need Help”

@metroplexss Thanks for joining the seller Community and for your post! 

At this time Square does use bankers' rounding (for other readers there are links to our Support Center and more information above) and we recommend downloading the Transactions spreadsheet from your Square Dashboard for the most accurate reporting of tax information

I will share your request to be able to use standard routing rules with the Point of Sale team. It sounds like it would make accounting more efficient. If there are any updates I'll let you know in this thread. 

[aadams]

Helen is showing you how to download a spreadsheet that shows that Square is calculating tax wrong.  Amazing help.  

[blacklabimaging]

This is a problem for us too. We use multiple online sites for our customers to order items from us and services, all of which calculates taxes, correctly. Then when we go to ring up our customers here in the store for those online items, it's always off by a few cents. New Jersey has been gradually lowering their sales tax and its currently 6.625% The .625 on the end just cause so many issues with the rounding, its frustrating.

On another note... when we order items from some of our vendors, they also use amounts that are not conventional. We may order 5 of one item and the math works out to 1.076 per item. This of course will throw the purchase order amount from the invoice amount. Can this please be corrected. For retail stores that deal with a lot of inventory at strange prices, we need this flexibility.

[Helen]

@blacklabimaging It sounds like you're already using Square for Retail but I'm sorry to hear it's not meeting your business needs. Thanks for letting us know what you need, we'll continue to advocate for improvements with the Retail Team!

[vh35]

I just downloaded my 2020 transactions ... it rounds up and down. I have 3 of the same transactions in a row. All $75 but the sales tax is 3.54; 3.53 and 3.54. 

This is not helpful when trying to work with Quickbooks! I have to fix all the errors every time and now will I have to create. 

We are leaving Square for this reason

[avlgoods]

Please fix the tax calculations. On a $64.92 total of items with 7% sales tax, the tax should be $4.54, for a total of 69.46. Why did Square only charge $3.92? This is more than a few cents off. I checked the entire transaction and all the items are tagged with 7% tax.  If I use the number pad and enter the amount $64.92 then it adds $4.54 tax. Where is the descrepancy. It throws my spreadsheets off by a lot! 

[VanKalkerFarms]

I'm not sure what settings are on your device but a 7% tax works out perfectly when I added an item and a custom amount of $46.92 like in your example.  Something has to be set wrong or something because Square hasn't had a product miscalculating sales tax for millions of users for going on 10 years.  was there a coupon applied?

[Waterman]

This comment was created from merging the thread "Why use bankers rounding for sales tax still when it appears so unwanted?"

I have received information from Square on how Square calculates sales tax with "bankers rounding". The problem is that it appears it is conflicting with how everyone was taught to round in school and how most businesses, states, accounts, and accounting programs process sales tax. Most of us love this Square program but Square needs to realize this is setting us up for an audit from the Department of Revenue as our numbers don't match if we don't catch them. On top of that to make our customers invoices match with Square we must now enter the total tax free and include the tax in our subtotal thereby bypassing the whole purpose of the tax line for record keeping.

Example:

1 item: $270. + 6.35% Sales tax ($17.145) equals $287.145 or (on everyone else accounting) $287.15 But because of "bankers rounding" Square fails to round up and stays at $287.14.

All I ask is that square give us a choice on the type of rounding. 

[Chad]

Hello @Waterman, I went ahead and merged your thread since this topic has been brought up in the past. This makes the community easy to search for other members. 🙂

I will pass along your suggestion of giving sellers a choice on the type of rounding to our Catalog Team. 

[WorkingMan]

I'm new to Square and just now discovering this rounding issue. This is a matter of deep concern to our business. It forces us to spend (waste) time adjusting Square reports to real-world entities like Quickbooks, Excel and state sales tax agencies. It sets us up for unproductive hours explaining certain discrepencies in time clock calculations to our employees. It can cost us significant money that we cannot recover. 

For example, when Square tells us to collect say $2.01 in sales tax on a given transaction, and prints that amount on a customer receipt, we collect $2.01 from the customer. But the state uses a rounding formula that requires us to pay $2.02. On a single transaction, this one penny difference is no big deal but 1,000 such ERRORS add up to a $10.00 loss that must be sustained by the business. 

I'm not in business to forfiet $10 to rounding errors. It is UNACCEPTABLE to round down when we are required to round up. 

This issue seems to have existed for some time? Square has not addressed in a meaningful manner. Explaining in a support article how bankers rounding works is neither a solution nore an adequate explanation. 

Can someone from Square tell us something more about this? One of the undesirable effects of the Square approach is to increase the expense of using Square. Why has this not been fixed? Why have user requests to have the ability to choose a rounding method seemingly gone unanswered? 

This issue is costing all Square users money. I encourage more to speak up about this so as to gain the attention of the people who have the power to resolve this issue.

[Chad]

Hello @WorkingMan! 

Thank you for taking the time to share your thoughts and feedback on Square's tax rounding.

We use bankers rounding for calculating tax on items. Since this tax calculation works as intended there is nothing to fix. 

Having the ability to choose rounding options was mentioned as a feature request earlier this year. I'll make sure to flag your post to our Catalog Team, so your voice is heard when it comes to having a choice in rounding. 🙂

[Roam_Coffee]

@Chad your remark "...Since this tax calculation works as intended there is nothing to fix." clearly demonstrates that you guys do not understand what our issue is.

We are a seller in Oklahoma, we limit our use of square because of the problems we have with your rounding. We only use square in one venue since the tablet POS is affordable and convenient.

Personally I don't care if we use bankers rounding or "everyone else" rounding, I just want my tax lines to equal across square, QuickBooks and my state tax agency. I'll let you guess which one of those 3 is not playing nice.

This has been an ongoing issue with square dating back years and you guys have not give the sellers the opportunity to select the method of rounding, causing endless hours of chasing down errors when doing our accounting.

Your comment as a response to the issue is as unhelpful as saying "here at square we designed our software to not use the number 2, since it was designed that way, there is nothing to fix". that completely misses the point that EVERYONE ELSE uses the number 2 just like they do normal rounding. 

Perhaps it’s time to bite the bullet and stop using square as our POS all together.

[Helen]

Hi @Roam_Coffee, Helen here stepping in for Chad. I'm really sorry for the frustration this has caused. Currently, there isn't a way to choose your a different method of rounding, but I can see how being able to choose would help you (and others) to save you a lot of time! I'm sorry to hear this means you limit how much you use Square. If you'd like our team to check your account details/recent reports please don't hesitate to call our CS team who can take a closer look. We'll share any updates in this thread if they come up in future. Thanks for your patience in the meantime. 

[getmylab_online]

I'd like to echo the grave concerns shared by other posters that the "banker's rounding" method of calculating sales tax poses a significant problem with rounding errors when Square is integrated with external accounting systems.

It would be interesting to hear more about Square's rationale for selecting this as the only option for sales tax calculations when it seems apparent that most accounting software as well as tax agencies use the traditional "round half up" method.