Setting up tax, service charge and currency for your own country

Every country taxes restaurants differently, and plenty of software quietly assumes one of them. The alternative is simple: make the rules configuration, and let the operator enter theirs.

Here is what that configuration actually consists of.

What a tax configuration holds

Per branch, you set:

That is the whole thing. There is no hidden country setting underneath it, and no assumption that your rate matches somebody else’s.

Inclusive versus exclusive is not a preference

This is the setting people get wrong, so it is worth being precise.

Exclusive means the menu says 200, the tax is added on top, and the guest pays 200 plus tax. Common where prices are quoted before tax by convention.

Inclusive means the menu says 228 and the tax is already inside that number. Friendlier to the guest — what they read is what they pay — but it requires the system to work backwards to find the tax:

tax = inclusive price − (inclusive price ÷ (1 + rate))

The expensive mistake is multiplying the inclusive price by the rate directly. On one bill it is a rounding error. Across a month of receipts it is a number your accountant will find and you will have to explain.

Pick one mode, set it, and make sure your printed menu and your receipts agree with each other.

Service charge is not tax

Tax goes to the state. Service charge is your revenue — often shared with staff, but yours in the accounts.

Three rules follow from that:

1. It is calculated on the item value, not on the item value plus tax.
2. It appears on its own line on the bill. Merging it into item prices or into the tax line is how guests conclude they were misled.
3. It is posted to a revenue account in your books, not to a tax-payable one.

The order of calculation matters, and it should be decided once and locked into the system rather than argued about per bill. Item value, then service charge on that value, then tax on the resulting figure — or whatever your local rules require. What matters is that it is consistent and visible.

Why the settings are per branch

A second location may sit in a different city, a different tax zone, sometimes a different country. Making tax configuration a branch-level setting means:

• One branch can be registered and another not yet.
• Two branches can run different rates without maintaining two systems.
• Reports can be consolidated across both, because each order carries the rate that actually applied to it.

That last point is the important one. The rate is stored on the order, not looked up at report time. If you change your rate in March, February’s receipts still say what they said, and your reports do not silently rewrite history.

Currency

The branch has a currency, and orders carry it. Prices, costs, payroll and the ledger all speak the same one. There is nothing to convert and nothing assumed.

The two-minute setup, and one thing to check

1. Enter the rate and the name exactly as it must appear on a receipt in your country.
2. Choose inclusive or exclusive to match how your menu is printed.
3. Enter the service charge rate, or zero if you do not levy one.
4. Add your registration number.
5. Set the currency for the branch.

Then do the check that catches almost every configuration error: ring up one real order and read the printed receipt. Item value, service charge, tax and total, each on its own line, adding up to what the customer actually pays. If that receipt is right, the month will be right.

And one honest note: this article describes the mechanics. Which rate applies to your business, and whether you are required to register at all, is a conversation with your accountant — not something to copy from another restaurant, and not something a piece of software should pretend to decide for you.