Sales tax is a percentage that some governments require you to add to the price of certain goods or services, collect from your client, and then pass along to the tax authority. Whether it applies to your work depends on where you operate and what exactly you’re selling.
Why it varies so much
There’s no single sales tax rule. Rates, names, and the rules about what gets taxed change from country to country, state to state, and sometimes city to city. What’s called sales tax in one place might be VAT, GST, or HST in another. Some places tax physical products but not professional services; others tax design work, consulting, or software differently again.
- The rate you charge depends on your location and sometimes your client’s.
- Whether a specific service is taxable at all is a local rules question.
- You may need to register with a tax authority before you can legally collect it.
- You’ll typically have to remit what you collect on a schedule, and keep records.
Because of all this, Fee-Lion gives you a flexible tax percentage field rather than guessing a rate for you. We don’t tell you a number, and we can’t tell you whether your services are taxable.
Tip: Before you charge tax on anything, check with a local accountant. A 20-minute conversation about whether your services are taxable, what to register for, and how often to remit will save you real headaches at tax time.
A real-world example
Say you’re a photographer who delivers a printed album. In your jurisdiction, the physical product might be taxable while the editing labor isn’t, or the whole package might be taxed as one. A web developer two states over might owe no sales tax on the same kind of digital work, while a designer in another country adds VAT to every invoice. Same trade, three different answers, which is exactly why “consult a pro” is the honest advice.
How Fee-Lion handles it
Once you know your rate and what to apply it to, Fee-Lion makes it painless to charge consistently. Start by setting a default so you’re not retyping the number on every document.
- Go to Settings → Preferences in the left sidebar.
- Open the Tax section and enter your default tax percentage.
- Save. New estimates and invoices will pre-fill that rate.
On any individual estimate or invoice, the tax line sits below your subtotal. Fee-Lion applies the percentage to the taxable amount and shows the tax as its own line so your client sees exactly what they’re paying and why. You can:
- Override the default rate on a single document when a job needs a different one.
- Combine tax with a deposit % so the deposit is calculated on the right base.
- Carry the tax through automatically when you convert an estimate to an invoice, so the approved number is the billed number.
When the client pays through the portal, the tax is already baked into the total they’re charged, and it shows on their receipt. For your own records, your reports and CSV/PDF exports include the tax amounts, which makes prepping figures for your accountant much easier.
Tip: If most of your work is taxable at one rate, set it once in Preferences and only override the exceptions. That way the common case is automatic and you only think about tax when something’s unusual.
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