Profit is a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something

Tax is a compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

This article will explain the difference in profit calculated with include and exclude taxes.

Table of Content :

I. Configure Profit Tax Calculation

II. Examples - Include Tax

III. Examples - Exclude Tax


I. Configure Profit Tax Calculation

Step 1. Go to setup-more menu-module

More Setup Menu - Module Configuration

Step 2. Select the Report Tab, Enable Profit Tax Calculation

Enable Profit Tax Calculation on Tab Report

You can select Include or exclude Tax

Column

Description

Include Tax

Include tax means that the profit from the total sales + tax transaction will be reduced by the cost

Exclude Tax

Exclude Tax means that profit comes from Sales at less cost, sales + tax will not be calculated


II. Examples - Include Tax

Include Tax

Sales + Tax (3,128,000) - Cost (1,835,015) = Profit (1,292,895)


III. Examples - Exclude Tax

Exclude Tax

Sales (2,910,000) - Cost (1,835,015) = Profit (1,074,985)


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