# Calculating taxes in CORE

These three scenarios explain how CORE charges tax for time entries recorded against projects. The same applies to expense entries.

• Scenario 1: You are charging individual time entries for the same project at different tax rates.
• Scenario 2: You are charging all time entries for the same project at the same tax rate.
• Scenario 3: You are applying multiple tax rates to time entries and the ‘tax is taxed’.

CORE provides you the option to exempt projects from item taxes (Tax 1/2/3) and also main taxes (MST) to exclude item taxes.

• Scenario 1: You have applied different tax rates to time entries for the same project. Let us assume you have entered 1 hour for each activity and \$100 as Bill Rate for each entry.

Time entry with activity A; Tax 1 = 10% is charged
Time entry with activity B; two taxes are charged, Tax 1= 20% and Tax 2 = 30%
Time entry with activity C; three taxes are charged, Tax 1 = 10%, Tax 2 = 20% and Tax 3 = 30%

Activity A: 1 hour x \$100 x 1.1 = \$110
Activity B: 1 hour x \$100 x (1.2 + 0.3) = \$150
Activity C: 1 hour x \$100 x (1.1 + 0.2 + 0.3) = \$160

The resulting due amount on the invoice will be \$300 service + \$120 service tax = \$420

CORE taxes each time entry individually. In addition, when there is more than one tax, it sums them up before applying to the entry.
• Scenario 2: You have taxed all time entries at a single main tax rate for the same project. Let us assume you have entered 3 hours for activity and \$100 as the Bill Rate for each entry.

Main Service Tax= 10%
Activity: (3 hours x \$100) x 1.1 = \$330

The resulting due amount on the invoice will be \$300 service + \$30 main service tax= \$330

CORE applies the main tax after computing the total labor amount. If you tax a standard tax rate on all labor and expense, enter it as the Main Service Tax in Settings. CORE brings forward these values when creating new clients and subsequent projects.
• Scenario 3: You have applied multiple taxes to time entries and the ‘tax is taxed’ for the same project. Let us combine scenario 1 and 2. The individual time entries are taxed based on the activity (Scenario 1) and then that total amount is taxed (Scenario 2).

Activity A: 1 hour x \$100 x 1.1 = \$110
Activity B: 1 hour x \$100 x (1.2 + 0.3) = \$150
Activity C: 1 hour x \$100 x (1.1 + 0.2 + 0.3) = \$160

The resulting due amount on the invoice will be \$300 service + \$120 service tax = \$420

Total Service + 10% MST: \$420 x 1.1 = \$462

The resulting total due amount on the invoice will be \$462.