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Intuit

Use custom rates to manually calculate taxes on invoices or receipts

Learn how you can set up and use custom tax rates in QuickBooks Online.

If you need to charge another type of tax on top of the usual sales tax, don’t worry. In QuickBooks, you can track sales tax automatically, and then use the custom rates feature for other types of taxes. For example, use custom rates to manually track special tax rates like meals or excise tax.

If you just switched from manual sales tax, you can also use custom rates to continue tracking sales tax manually.

We’re rolling out the custom rates feature for everyone. Check if you can now switch to the new sales tax system. When you switch, you’ll be able to track sales tax automatically, and use custom rates. If you don’t have the option to switch yet, it should be available for you soon.

How to set up custom tax rates

You’re in charge of setting up the correct state or local rate for the type of tax you need to track. Then, you select the tax agency that you send your tax payments to.

Note: If you’re not sure about the correct rates, don’t forget to check your tax authority’s website, or ask your accountant. If you don't have an accountant, we can help find one near you.

When you’re ready, here’s how you can add a single or combined custom rate.

  1. Go to Taxes, then Sales tax.
  2. Select Sales tax settings.
  3. In the Custom rates section, select Add rate.
  4. Select Single or Combined.

    Add a combined rate to group individual tax rates that you charge at the same time. This way, you don’t have to select each rate when you add a new sale. You only need to select one combined rate and QuickBooks will calculate the total tax rate automatically. When you look at your report later, each rate is still tracked separately. It’s easy to know how much to pay each tax agency.

    For example, let’s say you want to use a custom rate for the state and local sales tax rates in Tucson. Here’s how your combined custom rate will look like. custom

  5. Enter the Name of the custom rate. If adding a combined rate, enter a Nickname for each rate you need to combine as one custom rate.
    Tip: Not sure how to name your custom rate? It’s good to be specific about the type of tax you need to track. It also helps to mention the name of the state, county, or city where that tax type applies. Here are some examples:
    • Tucson sales tax
    • CA excise tax on cigarettes

    This makes it easy to find and choose the right rate on your invoices or receipts.

  6. Select the Agency you file payments to. If adding a combined rate, select the agency for each rate you need to group as one custom rate.
  7. Enter the Rate, then Save.

How to use custom tax rates when you make a sale

After setting up your custom rates, here’s how to use them on your next invoice or sales receipt.

  1. Create an invoice or sales receipt. Then, go back to the steps below before you save your transaction.
  2. Select the small arrow ▼ icon next to Based on location. custom
  3. Select your custom rate from the list. If you need a new custom rate, select + Add rate.

    Note: Keep in mind that you can only use one custom rate on a transaction. If you need to charge multiple tax rates, set up a combined rate first.

  4. Make sure the total tax amount is correct.
  5. Select Save, or Save and send to email your customer their invoice or receipt.

Next steps: Review how much tax you owe

As you start using custom rates, it’s helpful to review what you owe from time to time. You can run the Sales Tax Liability report to view your sales tax info anytime. This makes sure everything is accurate before you file your return to your tax agency.

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