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shinde422
Level 1

Billable GST calculating ON TOP of PST

I am entering expenses into QB online and categorizing BC PST for items, then billing them back to the client.  I only charge out GST on my services.  When I add the expense reimbursements to the invoice, QB calculates the GST  on top of the PST amount... 

Example: 

Expense for $1200 plus $84 PST and $60 GST for a  total $1344

Entered as billable expense in QB....

Expense for $1284 plus $64.20 GST for a  total $1348.20

 

Could I get an explanation for this?

16 Comments 16
PatriciaT
QuickBooks Team

Billable GST calculating ON TOP of PST

Hi shinde422,

 

Thanks for reaching out. I'm glad to hear you're using the sales tax centre in QuickBooks Online to accurately manage and track your transactions. I appreciate you illustrating what's going on in your account. It's important to ensure your books are accurate and I want to make sure you get this sorted. 

 

The sales tax centre is one of QuickBooks Online's most powerful features which can help save lots of time and money. Ensuring everything is accurate as you go is the best way to take full advantage of this. Each province has unique tax laws, and our system is designed to help you navigate those. The behavior you've described definitely seems unusual, and I suspect it may be related to how PST is tracked for your province. If it's tracked as a non-refundable tax expense, the system may be including it in the expense amount for that line. Your provincial tax agency and your accountant are incredible resources if you'd like more information on how these should be recorded.

 

If you believe the system is doing this incorrectly, please reach out to our tech support team so we can take a closer look. We'll be happy to troubleshoot this issue thoroughly and I'm confident we'll get to the bottom of it. Here's how to get in touch.

 

Phone and Chat: Click Contact Us to learn how to reach phone and chat support.

Schedule a Callback: click (?)Help in the upper right > click Contact Us > explain your situation > click Let's Talk > choose Get a callback (Note: Callback hours are the same as regular phone hours.)

Social MediaFacebookTwitter, and Instagram from Monday to Friday between 9 a.m. and 8 p.m. ET

 

Have a great day!

ed30
Level 2

Billable GST calculating ON TOP of PST

Did this ever get answered?  We have the same question, with PST/GST on some bills, but we only charge GST on our invoices.  We understand that PST is part of the cost, and therefore shows up in the invoice as part of the cost of the billable expense (extended in the Amount column, not the Rate column), but should the GST be applied to that PST portion?  If billing customers for straight reimbursement, then the total will be 5% x 7% (GST on PST) or 0.35% higher on the customer invoice than the original expense bill.

In other words, the line item tax (GST) on the invoice should only be applied to the "Rate" (or subtotal amount from the billable expense) not the full "Amount" which adds back in the PST from the billable expense.

PatriciaT
QuickBooks Team

Billable GST calculating ON TOP of PST

Hi ed30,

 

Thanks for joining us here. Knowing how your taxes should be applied when recording your transactions is important. To be sure about this detail for your business, I'd recommend reaching out to an accountant or your provincial tax agency. The sales tax center in QuickBooks Online uses a robust system that's compliant with the CRA. If you see an issue with the reporting in the program, please reach out to us for further investigation using one of the options shared in my previous post.

 

We'll be happy to help!

Nicknarp
Level 1

Billable GST calculating ON TOP of PST

Hi,

 

We have this exact problem: QuickBooks silently adds PST to the expense when it is added to the invoice, then calculates GST and PST on top of that. As you know, this is absolutely not how those taxes work. Ideally, QuickBooks would omit the sales tax selection field from that invoice line item and retrieve the actual sales tax amounts from the Expense form.

 

One workaround is to mark the amounts as "out of scope of tax" on the Expense form and enter the amounts with tax included. This bypasses QuickBooks incorrect tax calculation and works if your business is not required to remit PST. If you are required to remit PST, then please do not use that option.

 

QuickBooks has two problems here: a bug calculating tax on tax, and a poor implementation of billable expenses.

 

-Nick

LauraAB
QuickBooks Team

Billable GST calculating ON TOP of PST

Hi Nick,

 

I appreciate you taking the time to share your thoughts on how QuickBooks Online is calculating and working with sales tax when it comes to billable items. I know how important it is for these calculations to be precise, and I'm glad to hear that you've found a workaround that works for you.

 

QuickBooks Online is designed with government tax regulations in mind, so when you come across something that doesn't seem quite right, it could mean there's an issue that needs to be addressed. In these kinds of situations, it's easier to see what you're seeing to identify where the issue may be, so I encourage you to reach out to our support team. I'll leave an updated list of the contact options below.

 

If you've already connected with us and have been told the program is working as designed, you're welcome to leave feedback for our product development team using these steps: How do I submit feedback? This helps us see the impact of certain features and gives us insight into where the program can be changed and enhanced to meet the needs of business owners. To stay up to date with new features and changes to the program, check out the QuickBooks Online Feature and Product Updates page.

 

As promised, here are the contact details I mentioned.

 

Schedule a Callback or start a Chat: click (?)Help in the upper right in QuickBooks Online > type and enter "Contact support" into the QB Assistant > click Contact Us > explain your situation > click Let's Talk > choose Get a callback or Start a Chat.

Social MediaFacebookTwitter, and Instagram.
Support hours are from Monday to Friday between 9 a.m. and 8 p.m. ET.

 

I hope you have a great weekend!

Nicknarp
Level 1

Billable GST calculating ON TOP of PST

Hi Laura,

 

I contacted support last night, who witnessed a live demonstration of this tax-on-tax behaviour and promised to follow up with their back end team.

 

Steps to replicate:

1. Create expense of $100 billable to "Test Customer" in account "Supplies and materials - COS" with tax code "GST/PST BC" and amounts exclusive of tax. See that QuickBooks correctly shows I paid $5 GST and $7 PST to that merchant.

2. Create invoice for "Test Customer" and open the add to invoice panel.

3. Note the expense amount in the panel is $107, including the PST.

4. Add the expense, which appears as $107 in the line items, and note its tax code is "GST/PST BC".

5. Note the tax amounts, which are $7.49 PST and $5.35 GST.

6. Note the total, which is $119.84.

 

If I paid the merchant $112, why is QuickBooks billing my customer $119.84 for this expense? QuickBooks is adding PST before inserting the expense into the invoice, then calculating GST and PST on top. That is tax on tax and is absolutely not how GST or BC PST works.

 

Perhaps a better solution for billable expenses would be to break them out in a separate table, including a separate tally of taxes paid on those expenses? I'm not "selling" these items, I'm extending a sort of credit to the customer.

 

I rely on accurate pre-tax totals to calculate my service fee to the customer. I cannot over-bill 7% on materials. Everyone who uses the billable expense feature is subject to this bug and Intuit has a duty of care to ensure this feature works reliably.

LauraAB
QuickBooks Team

Billable GST calculating ON TOP of PST

I appreciate the explanation. I'm glad to hear that you've already connected with our support team about this. From what you're describing, it sounds like they may be looking into this for you. If they've noted they'll follow up with you as well, once they've had the opportunity to thoroughly research this and check with our back-end teams, I'm sure they'll get back in touch to let you know what they've learned and what the next steps are if something needs to be fixed. If you don't hear anything from them and you're expecting to, however, feel free to reach out to support again and someone can check on it for you.

shinde422
Level 1

Billable GST calculating ON TOP of PST

I hope this is resolved as it has been a noted issue for at least a year, and I have been having to manually correct all of my billable expenses that have had PST attached... a considerable waste of time and effort.

vvelikov
Level 1

Billable GST calculating ON TOP of PST

I have the same problem.  I just want to bill the customer for exactly what our supplier's bill is.  I can't find any kind of report that supplies me with the net amount, the PST and the GST shown seperately and the Total.  Everything groups the PST and GST together into one figure.  Using the "Add Time and Costs" automatically builds the PST into the bill amount so then the invoice to the customer charges GST on this inflated amount that includes the PST.  Currently, I have to pull up the actual physical supplier bill and manually deduct the GST so I can arrive at a figure for the invoice to the customer.  This could be 40 bills, I am having to do this for to get a correct invoice.  Very time wasting and sounds like the community has been asking to have this corrected for quite a while now.  

1130WPV
Level 1

Billable GST calculating ON TOP of PST

Hey - thanks Quickbooks for the marketing spiel...   but it sounds like your back-office has been looking into this for over a year and have not yet produced a fix.

 

So, I guess your sales tax centre is not "one of QuickBooks Online's most powerful features which can help save lots of time and money."

Trish_T
QuickBooks Team

Billable GST calculating ON TOP of PST

Hi 1130WPV,

 

Welcome to Community! QuickBooks Online calculates the Sales Tax based on Government Guidelines for each province.  From the information I've gathered from all posts in this thread, I'd recommend contacting us using one of the options listed below. 

 

Schedule a Callback or start a Chat: click (?)Help in the upper right of your account > type and enter "Contact Support" into the QB Assistant > click Contact Us > provide a brief summary > click Let's Talk > choose Get a Callback or Start a Chat.
Social MediaFacebookTwitter, and Instagram.
Support hours are from Monday to Friday between 9 a.m. and 8 p.m. ET.

 

This will allow us the opportunity to take a closer look at the root cause of this activity in 'real time' in order to get it resolved in a timely fashion.

 

If you have any other questions, please feel free to reach out at anytime.  We'd be glad to help!

AmyDr
Level 1

Billable GST calculating ON TOP of PST

We made a PST paid on Material ONLY (billable). Which was set up to make PST refundable. 

 

Then we added GST and PST on Billable expense group rate. 

Make sure you add all four lines: 

GST on purchases (Input Tax Credit)

PST collected on sales (billable) (Purchase)

GST on sales

PST collected on sales (billable) (Sales)

 

Now when we set up the expense we use: GST and PST BILLABLE

 

Then when we bill the Customer (click the billable "ADD") the GST and PST BILLABLE comes in and the rates all come in correctly for sub-total, GST, PST and total. 

 

Works if you use inclusive or exclusive of tax.

AmyDr
Level 1

Billable GST calculating ON TOP of PST

We made a PST paid on Material ONLY (billable). Which was set up to make PST refundable. 

 

Then we added GST and PST on Billable expense group rate. 

Make sure you add all four lines: 

GST on purchases (Input Tax Credit)

PST collected on sales (billable) (Purchase)

GST on sales

PST collected on sales (billable) (Sales)

 

Now when we set up the expense we use: GST and PST BILLABLE

 

Then when we bill the Customer (click the billable "ADD") the GST and PST BILLABLE comes in and the rates all come in correctly for sub-total, GST, PST and total. 

 

Works if you use inclusive or exclusive of tax.

allterraspider
Level 2

Billable GST calculating ON TOP of PST

So, over a year later and this issue hasn't been addressed? What is that status of this fix?

allterraspider
Level 2

Billable GST calculating ON TOP of PST

I wasted about 45 minutes online with an agent only to be told they are working on it. I asked for a bug ID so that I could track the issue and was told this was a feature. I then asked for a feature number or some other means to know when this issue would be addressed and was basically told they weren't working on the issue.

 

If anyone knows of other invoicing software that has billable items tracking I'd love to know what they are. I'd jump ship in a heartbeat. I've raised numerous bugs with QB and never had any results getting them rectified.

Trish_T
QuickBooks Team

Billable GST calculating ON TOP of PST

Hi allterraspider,

 

Thanks for reaching out here.  It's essential that your QuickBooks Online Payroll is accurate and up to date.  I'd be happy to assist!

 

If you need to record historical payroll tax payments, you can do this seamlessly by following this helpful guide.  This enables you to record tax payments that were made prior to signing up to QuickBooks Online Payroll.  In addition, you can enter YTD information for your employees, if you haven't created any pay cheques as you will find here.

 

Please don't hesitate to contact us if you require additional assistance.  We'd love to help!


Schedule a Callback or start a Chat: click (?) Help in the upper right in QuickBooks Online > enter "Contact support" > hit Contact Us > provide a brief summary of your situation > hit Let's Talk > choose Get a callback or Start a Chat.
Social Media: Facebook, Twitter, and Instagram.
Support hours are from Monday to Friday between 9 a.m. and 8 p.m. ET.

 

Feel free to reach back out with other questions.  We're here for you!
 

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