8 Taxes
A tax is a sum of money imposed by a government, levied upon prepared food and beverages sold in a restaurant. The following table explains the Simphony Essentials methods of taxation:
Table 8-1 Tax Methods
| Tax Method | Description |
|---|---|
|
Value Added Tax (VAT) |
A VAT is a form of sales tax used in some countries. VAT is an inclusive tax, which means the tax is included in the menu item price. The global tax type can be set as European or United States. A VAT is calculated differently, depending on the global setting. In Europe, only inclusive type tax is calculated. In the United States, inclusive type tax and add-on type tax can be used at the same time. VAT inclusive taxes are broken out from sales totals on financial related reports (for example, Property Financial Report), with the inclusive tax reflected in the Tax Collected totals field. If
your property uses VAT, the following Reporting and Analytics templates
can be applied for the Open/Closed Check reports:
|
|
U.S. Inclusive Tax |
U.S. inclusive tax uses the item price and a percent value to calculate the tax amount. The tax is then included in the price of each menu item not added to the bill. For example, if the tax rate is 5% and the item price is $5.00, the inclusive tax method calculates by the formula: $5.00/(1+5%) = $4.76. The total cost for the customer remains $5.00, but the net sales price is $4.76 and the tax is $0.24. If U.S. inclusive tax is used, only one inclusive tax rate can be applied to a menu item. U.S. inclusive taxes do not appear on the Open Check Report in Reporting and Analytics, and do not print on Open/Closed Check reports. Additionally, inclusive taxes are broken out from net sales totals on financial related reports (for example, Property Financial Report), with the inclusive tax reflected in the Tax Collected totals field. |
|
Add-on Tax |
Add-on tax uses the item price to calculate tax, which is then added to the bill. For example, if the tax rate is 5% and the item is $5.00, the application calculates 5% of $5.00, posting $0.25 tax to the check and making the total due of $5.25. |
|
Breakpoint or Threshold Tax |
Breakpoints establish the points at which an increase of one cent in sales increases tax by one cent. For example, a breakpoint tax might be one percent for sales from zero to twenty cents and then two percent from twenty-one to forty cents. Twenty cents would be the breakpoint for this tax. |