Tax is applied to each invoice line item individually, giving you the flexibility to charge tax only on your taxable services and products. You can create reusable tax items and apply them to invoices and packages.
What is a tax item?
A tax item saves a tax name and percentage rate so you can reuse it across invoices and packages. When you create a tax item, Dubsado automatically adds a matching income category and expense category to your Chart of Accounts so you can track the tax you collect throughout the year and the tax payments you make.
Tax is applied per line item, not per invoice. This lets you charge tax on the services or products that are taxable while leaving everything else untaxed on the same invoice.
Add a tax item to a line item
You can either select a tax item you've already saved or create a new one directly from the line item.
Select an existing tax item
Saved tax items live in a popover on each line item, so you can apply one without leaving the invoice.
Open an invoice and click a line item to edit it, or add a new line item.
Click Select tax items on the line item row.
Check one or more tax items from the list to apply them.
Once a tax is applied, the Select tax items button updates to show the combined tax percentage for that line item (for example, 5.5%).
Create a new tax item
If the tax you need isn't saved yet, you can create it without leaving the invoice.
On the line item, click Select tax items to open the tax popover.
Click New tax item at the top of the popover.
Enter the Tax item name (for example, "Sales Tax" or "VAT").
Enter the Tax percentage as a number (for example, enter 5.5 for 5.5%).
Click Create.
The new tax item is saved for future use and applied to the current line item right away. If a tax item with the same name already exists, you'll see a "This tax item already exists" message — give the new tax item a different name and try again.
You can apply more than one tax item to a single line item. Each tax is calculated on the line item amount independently.
Tax items on packages
Packages use the same tax popover as invoices. When you edit a package line item, click Select tax items to apply a saved tax item or create a new one. Tax items you create on a package are saved to your workspace and reusable on invoices, and tax items you create on an invoice are reusable on packages.
Hide the tax percentage on client-facing invoices
By default, your clients see the tax percentage on each line item. You can hide the per-line breakdown so they only see the total tax amount on the invoice.
Navigate to Invoicing ➔ Settings ➔ Appearance, or go to Settings ➔ Invoice appearance.
Toggle Show taxes on each line item to off.
When this toggle is off, your client sees the total tax on the invoice but not the percentage breakdown for each line item.
Remove a tax item from a line item
Removing a tax uses the same popover you used to apply it.
Open the invoice or package and find the line item.
Click the tax percentage on the line item to open the tax popover.
Uncheck the tax item you want to remove.
Edit or delete tax items from Chart of Accounts
Your tax items live in Chart of Accounts alongside your income and expense categories. You can create, edit, and delete tax items from there without opening an invoice.
To get to the page, navigate to Dashboard ➔ Finance reports ➔ Chart of accounts.
Create a tax item from Chart of Accounts
On the Chart of Accounts page, click New category.
Select Tax category from the dropdown.
Enter the Tax item name and Tax percentage.
Click Create.
Edit a tax item
Click the tax category row in the table to open the edit modal.
Update the name or percentage.
Save your changes.
Delete a tax item
Click the tax category row in the table to open the edit modal.
Click the delete option.
Confirm the deletion.
Deleting a tax item won't affect past or open invoices that already have the tax applied. However, any tax collected under that name going forward won't be recorded in Dubsado.
FAQ
Can I apply tax to an entire invoice at once?
No. Tax is applied to each line item individually. This lets you charge tax only on the services or products that are taxable.
Can I apply more than one tax item to a line item?
Yes. You can select multiple tax items for a single line item, and each tax is calculated on the line item amount.
Can Dubsado automatically calculate tax based on my client's location?
No. If you need different tax rates by location, create a separate tax item for each rate (for example, "CA Sales Tax" and "NY Sales Tax"). When you create an invoice for a client in a given location, apply the matching tax item to the relevant line items.
Can I delete a tax item from all invoices at once?
No. To remove a tax item from existing invoices, you'll need to edit each invoice individually and uncheck the tax item from the relevant line items.