Setup - Tax

Every tax on your Shopify orders needs a Xero tax rate. On Setup - Tax you choose which one. You don't need to type your taxes in: a Shopify tax is added to the list automatically the first time an order that uses it syncs, so most of the work is picking a Xero tax rate for each one.

How to Set Up Your Taxes

Step 1: Pick your default tax rates

The Default tax rates card at the top is the fallback for anything you don't map yourself.

Tax on Income: used for taxed lines when you haven't picked a rate in the list below.
Tax Free Income: used for lines with no tax, like tax-free products or exports.

Step 2: Pick a Xero tax rate for each Shopify tax

Each Shopify tax in the list shows its rates, one line per percentage, with a Xero tax rate dropdown beside each. Pick the Xero tax rate that rate should post with. Leave it on Use default tax rates if your default tax rates are right for it.

For example, an Australian store would pick GST on Income for its 10% GST rate.

If you see Auto-fill can pick ... Xero tax rates for you at the top of the list, click Auto-fill all to fill in the suggested rates, then check them.

Step 3: Save

Click Save in the bar at the top of the page.

That's it. New orders now post each tax to Xero with the rate you picked. The rest of this article is reference, for when you need a different rate by country, want to add a tax yourself, or see a warning on the page.

How the Right Xero Tax Rate Is Chosen

For each line on an order, the app looks at the Shopify tax on that line and uses the first of these that applies:

A State or province rate for where the order ships to, if you set one on that tax.
A Country rate for where the order ships to, if you set one on that tax.
The Xero tax rate you picked for that percentage in the list.
Your default tax rates: Tax on Income for a taxed line, Tax Free Income for a 0% line.

Two rules apply on top of that. Order lines with no tax always use your Tax Free Income rate. If a line has more than one tax, the last one decides. You can see these rules on the page too: click the (i) beside Tax name at the top of the list.

A line under a tax's name, such as Different rate for orders to Ontario and Australia, means that tax has country or state rates. Click the tax to see them.

Auto-fill

Auto-fill picks the Xero tax rate that matches each Shopify rate. When it has a suggestion, the dropdown has an amber outline and the row has an Auto-fill button.

Auto-fill all, at the top of the list, fills in every suggestion at once.
Auto-fill on a row fills in that tax only. The pop-up has the same button beside Rates.

Nothing changes in your setup until you click Save, so you can check each suggestion first. If no Xero tax rate matches a rate, pick one yourself or leave it on Use default tax rates.

What Each Setting Means

Click a tax's name, or Edit on its row, to open its pop-up. It has three sections, covered below in the order they appear. When you are finished, click Done (or Add for a new tax), then Save at the top of the page. Done only closes the pop-up: nothing is saved until you click Save. Cancel closes it without keeping your changes.

Shopify tax

Name: the tax's name exactly as it appears on your Shopify orders, for example GST. Orders are matched to the tax by this name, so a different spelling won't match. Two taxes can't have the same name.

Rates

Rate: a percentage this tax uses on your orders.
Xero tax rate: the Xero tax rate that percentage posts with. Use default tax rates uses your default tax rates instead.
Add rate adds another percentage. The bin icon removes one.

Where the order ships to (optional)

Use a different Xero tax rate for orders shipped to certain countries, states or provinces. A rate here applies to every percentage of this tax for orders shipped there. For example, an Australian store can post orders shipped to New Zealand with GST Free Income.

Countries: click Add country, type or pick the code (for example AU for Australia), then pick the Xero tax rate. The country's name shows beside the code so you can check it.
States and provinces: click Add state or province, type or pick the code (for example CA for California), then pick the Xero tax rate. If an order matches a country and a state, the state rate wins.

How to Add or Delete a Tax

Taxes are added for you when orders use them, so you only need to add one yourself to set it up before its first order.

To add one, click Add Shopify tax, at the top of the page or at the bottom of the list. Fill in the pop-up as described above, click Add, then Save.
To delete one, click the ... button at the end of its row, then Delete followed by the tax's name.

The tax is replaced by a line saying it was removed. After you save, its orders use your default tax rates, and it comes back to the list the next time an order uses it. Click Undo to keep it, or Discard in the bar at the top to undo every change since your last save.

When a Xero Tax Rate Is No Longer in Xero

If a Xero tax rate you picked has been deleted or archived in Xero, the page tells you so you can pick another:

A rate in the list shows a red outline and reads (no longer in Xero, pick another). Pick a new Xero tax rate from its dropdown.

A country or state rate shows a red line under the tax's name: A country or state rate is no longer in Xero. Click Edit to pick another. Click Edit and pick a new rate under Where the order ships to.

Then click Save.

If you get stuck, email us at help@hyvelabs.co with your shop URL and the name of the Shopify tax, and we'll help you set it up.