Set up and manage sales tax codes

This guide shows you how to set up new sales tax codes and add custom rates in QuickBooks Online. 

Set up a new sales tax code

You can add a new sales tax for a province, combine existing codes into a group rate, or create a fully custom tax.

Follow this link to complete the steps in product

1. Select Manage sales tax.
2. Select Add tax.
3. Under What type of tax do you want to add? select Add next to one of the below options and follow the prompts. If you use payroll in QuickBooks Online, you may need to select Sales Tax instead of Payroll Tax.

Provincial

This option automatically sets up new tax agencies and the most common tax codes for a specific province or territory. The list will only show provinces that you have not set up yet:

• You will be prompted to select a province or territory from a dropdown menu.

Group rate

This option lets you combine existing tax codes into a single "combo rate".

• For more details on group rates, see How do I add a group sales tax rate?
• To learn about a common group rate, review How to set up a sales tax rate for Meals and Entertainment.

Custom

This option is for special cases, as codes created this way will not report to Federal or Provincial Tax Agencies like the Canada Revenue Agency:

• You can use this to add a tax specific to your industry, such as a tobacco, hotel, or gasoline tax.
• It can also be used for tracking sales to U.S. customers.
• Another use is to set up an "out-of-scope" tax code for sales or expenses that do not fall under any tax.
• A custom tax must be a percentage and cannot be a specific dollar amount.

Add a custom sales tax rate for an existing sales tax agency

Use these steps to manually add a special tax rate for an agency you have already set up, like the Receiver General or Canada Revenue Agency. This is useful for tax rate changes or other special rates. It is better to add a new tax code rather than changing an existing one so all rates for that agency appear on the same return.

Follow this link to complete the steps in product

1. Select Manage sales tax. If you use payroll in QuickBooks Online, you may need to select Sales Tax as opposed to Payroll Tax.
2. Find the sales tax agency you want to add the new rate for.
3. Select Add custom rate.