Give shipping its own Xero tax rate

Shipping normally takes its Xero tax rate from the tax Shopify charged on the order, the same way your product lines do. Delivery that carries tax lands on the matching tax rate, and delivery with no tax lands on your tax-free rate. For most stores that is exactly right. If your shipping should always be taxed, always tax-free, or should use a different no-tax code from your products, we can give shipping tax rates of its own.

One store selling GST-free goods found every shipping line arriving in Xero as GST on Income while the product lines were GST Free. Xero then refused manual edits to those invoices until the shipping line was corrected by hand. Setting shipping to GST Free fixed every invoice from that point on.

How it Works

We set two rates for your store: one for shipping that carries tax, and one for shipping that does not. Every shipping line is posted on one of those two rates instead of following the products. If you want shipping taxed every time, both rates are your taxable rate. If you want it tax-free every time, both are your tax-free rate.

Refunded shipping on a credit note uses the same rates, so a refund reverses the line exactly as it was invoiced. The shipping amount, the shipping account and the invoice total do not change — only the tax rate on the shipping line does.

When to ask for it

• Your products are tax-free but delivery should still carry tax, or the other way round.
• Shipping with no tax should use a different code from your products' tax-free rate, for example No Tax rather than Zero Rated.
• Your accountant wants delivery reported on its own tax rate.

How to Request Setup

Email us at help@hyvelabs.co with your shop URL and the names of the two Xero tax rates to use: one for shipping that carries tax and one for shipping that does not. If you want the same rate every time, name that one rate. Both rates must already exist in your Xero organisation.