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(This is a continuation of the Edit Rate Definition Dialog documentation -- see that topic for more information.)
Important -- Although you can add Tax transactions manually, it's recommended that you use the Auto-add tax check boxes instead. Otherwise you will have to edit every rate definition any time the tax rates change.
Assuming you don't add the tax manually (see below), simply check the appropriate Auto-add tax boxes. There is one box for each of the 5 possible Tax Rate definitions, but only those that are active according to Taxes Setup will be enabled (and they will show the selected category name for the tax). When you check these boxes, the With Tax amount is automatically calculated.
One exception to using the auto-add option would be for special cases where the tax does not apply to the total charges less discounts. For instance, if you add a Discount to the rate as mentioned above, the Discount transaction would be taken into account for taxes. Therefore you would have to add the tax as a separate transaction and not use the Auto-add tax feature if the Discount should not reduce the tax (though this would be unusual).
Another exception would be if you want your rates to be "rounded" after tax, such that exact calculations are difficult without rounding problems. For instance, if your daily rate is $23.00 but that already includes a 10% tax (roughly. $20.9091 + $2.09091 tax), then it may be easiest to enter Charge and Tax transactions separately so it always comes out exactly $23.00 per day.
When adding Tax transactions manually, it's a good idea to use the Quantity field -- which for taxes is actually the amount to be taxed. This results in more accurate tax reporting, as well as a meaningful note on receipts. So for the example above, the Charge for the rate would have an Each value of $20.9091. Then you would enter a Tax transaction with a Qty of 20.9091 (the amount taxed) and an Each of $0.10 (which means 10%). This rounds out to an even $23.00 no matter how many days are added, and the amount taxed will also be accurate.
Other Rate Definition Topics:
Multipliers and Filtering
Rate Setup Examples
Be sure to go through the Rate Setup Examples for help with basic rates setup. We don't recommend attempting to set up your rates without working through some of the examples first!
Rates Setup Dialog
Rate Setup Examples