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?

[Laurenduxbury]

Aaah okay 😊

Yes everyone has the issue. There are actually many other strings in the forum complaining about it. I am also considering dropping Square. 

[aadams]

If every deposit you have is off by a few cents, I would suggest you do this.  Pick a day of sales that are all taxable sales and the deposit for that day was off by a few cents.  Go to Reports, Item Sales, and select that day.  Click "Filter by" at the top and choose payment method.  Click on "all payment methods" and check card.  Click Export, Summary CSV and download the days sales by item into a spreadsheet. 

Total the net sales and tax from the report.  I then take the amount of my sales tax, which is 6%, and create a formula in the Unit column next to the tax.  I multiply the Net Sales x 6% and put that amount in the column next to the tax.  When you total that up and compare it to the tax collected from Square, this is where most people on this thread are having an issue in that it is off by a few cents.   Square calculates the sales tax one way, and the Sales tax entities of this country calculate it another way. The tax collected by square is less than the amount that should be collected, meaning my business has to pay the uncollected sales tax.  

You are saying your numbers match square, and your deposit if off a few cents.  Most folks on this thread are having that issue because of this incorrect calculation by square.  If yours is some other reason, I am not sure what to tell you except to contact them directly if possible.  Good luck!

[GaetanLabrecque]

Hello

I have two apply two different taxes here in Quebec.  One is GST (5%) and the other is the provincial tax (9.975 %).

When I use Excel or an online calculator I don't arrive to the same amount that I see in Square tax report.

For example, for my month of february

In the Square report

Taxable amount 4711.96 $

GST 235.66 $

Provincial tax 469.75 $

Total taxes : 705.41 $

When I use and online tax calculator (or Excel) I get

Taxable amount 4711.96 $

GST 235.60$

Provincial tax 470.02 $

Total taxes : 705.62 $

Why do I get a different total?  I guess it has to do with having 3 decimals and the way square calculates, but what can be done so I could use the square report as is as my tax report?

Greetings

[JustinC]

Sounds like you're on target. The discrepancy has to do with Banker's Rounding. In his best answer, VanKalkerFarms links a couple articles that explains how Square rounds. Merged your post to the thread. 

@GaetanLabrecque

[GaetanLabrecque]

Hello Justin. 

So square will keep this calculation, even if we all export those numbers in accounting system that use a different method of calculation?  

Greetings

[TPJteam]

I have to change a product price or a discount we may have applied to that product in order to get my accounting to accommodate Square's Bankers Rounding method.  We businesses all know that sales tax is collected for the state, and so collecting, accounting and remitting must be done according to the state's rules.

This is a perfect example of Square creating a system for the system's sake and not for your customer (you know, the one who generates income for your company?)

So what we need is for you all at Square to start designing your system FOR us.

That would make running our businesses more efficient and would be much appreciated.

[aadams]

Since all of us on here on here think it's poor business to have Square not calculate Sales Tax correctly, let's do some research and post here  point of sale companies that actually do things correctly.  Businesses that listen to their customers.

[nika]

@aadams We can appreciate that this is a passionate topic for you. However I want to remind you of our Community Etiquette Guidelines. The Community is a space for productive conversations and we ask that our members be mindful of that.

[RoamCC]

@nikaI don't mean to encourage "passionate" speech but @aadams has a point. This is a major issue that not only costs money but costs us a time every month when we have to pay taxes and have to spend time cleaning up our books. You guys collect hundreds of thousands of dollars in fees from vendors and I'm sure you don't have rounding errors that hurt your bottom line. Perhaps it would serve this community better to have a solution for this problem instead of wasting time highlighting a comment from a paying customer who has every right to be frustrated with this issue that has been ongoing for years.... Just saying....

[aadams]

Productive conversation should result in someone at square listening.  I think the conversation has been going on for several years. 

[aadams]

Your community etiquette guidelines link is broken, fyi.

[Joe]

Hi @aadams - stepping in for Nika in her absence on this one. The link worked fine on my side, but placing it again here. It's important to keep in mind our Etiquette Guidelines, and we appreciate you take time to review.

Cheers.

[VanKalkerFarms]

neither Link works, probably in a forum the public can't see but you as an admin can.

[frances_a]

Thank you for flagging @VanKalkerFarms! 

The link does work for me as well, so not sure what the issue might be; maybe as you said, only admins can access it.

We'll attempt to fix it once again. Thanks!

[aadams]

Hi Joe, here is the message I get when I click on your link for your "etiquette guidelines":  

"Look like this post has been moved, or you don't have access to read it.

Click your browser's Back button to continue.

I would sure like to read your etiquette guidelines.  But I am glad you are here!  There are a lot of people on this thread wondering how we can get square to calculate sales tax the same way our tax jurisdictions calculate it?  Bankers rounding might work for your fees, but it doesn't work for sales tax.  Is there anyone at square that can fix this?  

[parani]

Stripe rounds following customary rounding rules

[smart413]

I too share the same concerns... may I suggest allowing users to override the tax amount with a reason, similar to what Quickbooks does?

[chrismc]

Ditto - just make it an editable field so we can fix it before the invoice goes out to the Customer.  Easy fix!!!

[Hot-Diggity-Dog]

I need to add my 2.005 cents to this topic.  Ir appears to be about 3-1/2 years since the last post, and this has still not been addressed.  Besides the commonly accepted rounding rules not being used, and the square reports not meshing with QuickBooks or any accountant -- I'll give you another reason to fix it.  We operate a primarily cash business, and we need our prices including tax to be round numbers - $5.00, $6.00, $8.00.  I can calculate the tax and back it out so that I come up CLOSE, but not good enough for some items.  Or it'll come out right for one item, but when multiple items are added together, we get a total of $13.01 or $14.99 - not fun for a cash operation.  

I would like to see one of two options:

1. Allow us to enter the price including tax, then the system should back-calculate the taxes for reporting.

2. Allow us to enter the price using 3 decimal places so we can get it to come out right.  For instance, our total tax rate is

8.2%, so our price for a $7 item would be 6.426 plus .574 tax = $7.00.  

Like many people on this thread, I think "working as designed" is a very poor answer considering how much extra work this is causing all Square users.  

[VanKalkerFarms]

I agree the rounding is weird that they went this way, but it is pretty clear that isn't changing.  

The good news is you can do exactly what you want to do by listing the item with tax included. it is an option when you are setting up your tax rate here https://squareup.com/dashboard/business/manual-taxes/new there is an option at the bottom to "Include tax in item price".  then you have to enable it on your item. This should stop you from ending up with totals like $13.01.

[Hot-Diggity-Dog]

Bob!  Thank you SO much!  I was on the phone with Square Support for almost an hour and they were not able to help me.  Next time I have a question, I'll come to the user community first.