Payment fee tax class based on product tax class

@mderooij could you tell me in which country we’re talking? How does this work? Does it work already in WooCommerce (if yes, which option I should choose and where?)

Imagine I have the following situation:

Product A – rate Standard – 21 %
Product B – rate for books – 10 %

Payment fee $10, what should be the tax rate?

Thanks for the clarification
Karolina

Hi Karolina,

I am living in the Netherlands.
In Woocommerce everything works fine, because per product I can assign a different tax class.

In your example it depends on the price of Product A and Product B.

Example for a 1% payment fee:
Product A – rate Standard – 21 % – 121 euro incl. VAT (so 100 euro ex. VAT)
Product B – rate for books – 10 % – 22 euro incl. VAT (so 20 euro ex. VAT)

Cart total incl. VAT: 143 euro incl. VAT
1% payment fee = 1,43 euro

Because product A is 84,6% percent of the cart total (121/143 * 100%), 84,6% of the payment fee should have 21% VAT and 15,4% of the payment fee should be taxed with 10% VAT).

Thanks for the details. Let me think about it a bit. In WooCommerce you can’t have one product/fee with split taxes. So in this case there would need to be as many fees as you have different taxes. In our case – two fees with two different taxes. The percentage of fees would be calculated based on the sum of the products with different taxation. Is that right?
K.

I see I made a little mistake. Better to make the sum without VAT and easier numbers:

Product A (VAT class: 21%) – 80 euro ex. VAT
Product B (VAT class 9%)– 20 euro ex. VAT

Cart total: 100 euro ex. VAT
1% payment fee = 1,00 euro ex. VAT

80% of 1,00 euro = 0,80 * 21% = 0,968 euro incl. VAT (so 0,168 euro is VAT)
20% of 1,00 euro = 0,20 * 9% = 0,218 euro incl. VAT (so 0,018 euro is VAT)

So the payment fee is distrubuted in proportion of the value of the products ex VAT.

The same thing applies here for shipping costs. So if a customer orders hiking shoes (21% VAT) and a book about hiking (9% VAT) the VAT in the total shipping cost is split into a 21% amound and a 9% amount. This already works properly in Woocommerce (without additional plugins) so I guess the development of the payment fee plugin should be similar.

Do you think you can manage some changes?
Otherwise I have to look for another plugin.

Hi @mderooij thanks for the heads up, I’m sorry that I haven’t look at it earlier.
I’ve used the same values as WooCommerce does. Could you grab RC1 version of the plugin at https://downloads.www.ads-software.com/plugin/woocommerce-pay-for-payment.2.0.18rc1.zip and test? If it will be OK, I’ll release it.

Just download a zip file and upload it via Plugins / Add New / Upload and confirm overwriting the current plugin. Then you should see the new option in tax settings of the payment fee.

I don’t get the right numbers. To be sure I shared my payment fee settings. This payment fee is a 3% payment fee.
https://ibb.co/cvX9zdC

I filled my shopping cart with a 21% VAT and a 9% VAT product. The third product is free:
https://ibb.co/BfjWjFX

Product A (159,98 euro including 21% VAT) = 132,21 euro ex. VAT
Product B (29,99 euro including 9% VAT)– 27,51 euro ex. VAT

Total amount ex. VAT: 132,21 + 27,51 = 159,72 euro

Product A = 82,77% of the total amount
Product B = 17,23% of the total amount

Payment fee of 3% = 159,72 * 0,03 = 4,79 euro

82,77% of 4,79 euro = 3,965 euro * 1,09 VAT = 0,899
17,23% of 4,79 euro = 0,825 euro * 1,21 VAT = 4,797

Total payment fee = 0,899 + 4,797 = 5,696 euro

As you can see in the screenshot of the shopping cart the payment fee is 5,80 euro in total. Also the total amount of 21% VAT and 9% VAT are the VAT values of the products only and not the VAT of the payment fee.

If anything is not clear, let me know. If you prefer I am also available by Skype to discuss everything.

Cart total: 100 euro ex. VAT
1% payment fee = 1,00 euro ex. VAT

80% of 1,00 euro = 0,80 * 21% = 0,968 euro incl. VAT (so 0,168 euro is VAT)
20% of 1,00 euro = 0,20 * 9% = 0,218 euro incl. VAT (so 0,018 euro is VAT)

@mderooij I see, it looks like it might be a rounding problem since the calculation is done by WooCommerce itself and out of my reach. Could you grab a https://downloads.www.ads-software.com/plugin/woocommerce-pay-for-payment.2.0.18rc2.zip and test it? I’ve changed it and now the plugin loads the WC setting instead of rounding to two decimals.

Just make sure that you have set the Number of decimals in WooCommerce / Settings / General to at least three.

Thanks for your time

The difference in payment fee is 0,10 euro (it have to be 5,696 euro, but in my cart it is 5,80 euro), so it isn’t a rounding issue.

I installed the new plugin version, but the problem is still there.

By making a calculation I found out what happens:
It simply applies 21% VAT on the payment fee of 4,79 euro.

4,79 euro * 1,21 = 5,7959
If you round that up you have the 5,80 euro that is shown in the shopping cart.

@mderooij I see, I found the piece of code, but I couldn’t figure out how does it WooCoommerce with shipping. I will open a support thread at WooCommerce support and see if they could help us out. Thanks for your patience.

It looks like the fee is not ready for tax value “inherit” is shipping is.

• This reply was modified 4 years ago by Karolina Vyskocilova.

Here is the link to the support thread with WooCommerce: https://www.ads-software.com/support/topic/payment-fee-tax-class-based-on-product-tax-class-2