Commission Calculator: EX TAX vs. INC TAX

Overview:

When calculating commissions, it is important to know whether the amount is calculated with or without VAT (Value Added Tax).

If your commission is based on the gross total plus VAT, you must use the EX TAX option in your commission calculator.

EX TAX 

When you offer 10% commission on the gross total plus VAT, your calculator should be set to EX TAX. This means:

• The commission is calculated based on the total amount before VAT is applied.
• VAT is added separately, so the VAT amount is not included in the commission calculation.

For example, if the gross total is £1,000 and VAT is 20%:

• Gross total before VAT: £1,000
• VAT (20% of £1,000): £200
• Commission (10% of £1,000): £100
• Total with VAT: £1,200 (this is the final amount billed to the customer, but VAT is not included in commission calculation)

INC TAX
This option would calculate the commission on the total amount including VAT.