thread Re: Does unit item cost include VAT/TAX in Payments Troubleshooting

Does unit item cost include VAT/TAX

Dirky — Sun, 21 Sep 2025 11:53:36 GMT

When setting item costs on products, should I enter this inclusive of VAT or not?

On our previous POS the cost price was always excluding VAT and the sell price was inclusive of VAT.

Obviously its important I get this right, or it will impact our profit reports and they may be 20% out!

Thanks

Re: Does unit item cost include VAT/TAX

tranguyen — Wed, 24 Mar 2021 12:21:13 GMT

Hi @Dirky, thanks for your post!

At the moment, Square for Retail doesn't track VAT for unit cost. We can only set and track VAT for sell price at the moment.

This is something that has been flagged previously with the Retail team so I'll be sure to surface this to them again as well.

Re: Does unit item cost include VAT/TAX

Dirky — Wed, 24 Mar 2021 14:21:21 GMT

Hi @tranguyen ok, that seems a glaring omission, sadly. It seems every time I think I have found the perfect solution or the perfect POS to use, there is a stumbling block.

Do you know how the profit is calculated then? Is it between the sell price inclusive of VAT, or the sell price exclusive of vat?

This may at least give me an idea of if I should set the cost price to include VAT or not.

Thanks

Re: Does unit item cost include VAT/TAX

tranguyen — Wed, 24 Mar 2021 16:39:56 GMT

I actually had a chance to test this on our account @Dirky and from looking at the Cost of Goods Sold report in particular, the revenue & profit show the net price (without VAT). I hope this will help!

Re: Does unit item cost include VAT/TAX

Dirky — Wed, 24 Mar 2021 16:45:07 GMT

Thanks @tranguyen so does that mean I should put my item cost prices without VAT i square?

Re: Does unit item cost include VAT/TAX

tranguyen — Wed, 24 Mar 2021 17:50:26 GMT

I think it might be worth testing with having the cost price with VAT and without VAT to see how the calculation work for you @Dirky! You can read more about Square for Retail Reporting Options in our Support Centre and check our FAQs here.

If you have any concerns about using Square for Retail reporting for tax or accounting purposes, it's best to get in touch with a tax professional.

Re: Does unit item cost include VAT/TAX

FraSazz — Tue, 20 Dec 2022 16:36:16 GMT

Hi,

VAT on square is complicated, I have a similar problem with VAT, because in the modifier the VAT cant be changed, so if you a customer eat in and you have one item that has VAT and the modifier has not vat the system will calculate vat in both items. so you will end up to pay more vat for an items that doesn't have VAT.

Re: Does unit item cost include VAT/TAX

k_atie — Wed, 21 Dec 2022 12:29:51 GMT

Hello @FraSazz, thank you for your post and your feedback on this subject.

At the moment, it is not possible to apply VAT to item modifiers unless you create an entirely new item. Then you'd be able to apply VAT tax to that item.

I can see why it would be a useful feature though. I'll be sure to pass your feedback over to our product team for visibility.

Let me know if you need anything else.

Re: Does unit item cost include VAT/TAX

Livb — Tue, 26 Mar 2024 22:26:58 GMT

Hey! I am trying to work this out! Did you manage to find out of the unit price should be including VAT or not? Ah Help! Thanks

Re: Does unit item cost include VAT/TAX

Breffni — Wed, 27 Mar 2024 10:41:21 GMT

Hi @Livb, thanks for your post 🙂

If you include VAT in an item it would be applied to the overall item price.

You can learn more about managing tax settings here.