How Sales Tax Works in Synder Per Transaction Mode for QuickBooks Online

• Per-Transaction Mode Overview
• Sales Tax Calculation Logic
• Sales Tax Settings for US-Based QuickBooks Companies
• Sales Tax Settings for Non-US QuickBooks Companies
• Important Notes
• FAQ

This guide explains how sales tax is handled in Synder when using Per-Transaction (PT) mode and how it interacts with QuickBooks Online. 

Use this guide if:

• You use Per-Transaction mode in Synder
• You use QuickBooks Online as an accounting platform
• You sync transactions from payment processors (Stripe, PayPal, Square, etc.)
• You need sales taxes to appear correctly in your accounting platform
• You want to understand how Synder calculates, maps, and applies tax codes

Per-Transaction Mode Overview

In Per-Transaction mode, configure one of the following options:

• Option 1: Apply Taxes – Disabled.
• Option 2: Apply Taxes – Enabled.

Option 1: Apply Taxes Disabled

Use this configuration when the tax should simply be included in the sales total.

With “Apply Taxes” is disabled, Synder records tax as a separate line item in the transaction, and no tax code is applied.

Example transaction with Apply Taxes Disabled

Option 2: Apply Taxes Enabled

Use this configuration when tax details must be transferred to QuickBooks Online and tax codes must be applied. 

Example transaction with Apply Taxes Enabled

Sales Tax Calculation Logic

Synder does not calculate taxes independently. Instead, it determines the tax rate based on information received from the payment processor.

The process works as follows:

1. The payment platform sends Synder:
   • Transaction total
   • Tax amount
2. Synder calculates the tax rate (%) from this data.
3. Synder attempts to match the calculated rate with a tax code in your accounting system.

Sales tax synchronization differs for US-based and Non-US QuickBooks companies.

Sales Tax Settings for US-Based QuickBooks Companies

Companies using the QuickBooks Online US edition rely on Automated Sales Tax (AST).

Automated Sales Tax (AST) calculates tax automatically based on:

• Customer location
• Company address
• Tax jurisdiction rules

Because of this, Synder does not apply tax percentages directly. Instead, the app marks line items as taxable or non-taxable and lets QuickBooks calculate the actual tax.

How to Enable Sales Tax Sync

1. Select the organization in the top-left corner
2. Click Settings in the left menu
3. Choose the integration in the Integration dropdown
4. Move to Taxes tab
5. Enable Apply Taxes

Alternative path:
Person icon at the top right corner → Organization settings → Sync settings under the needed integration. 

After completing these steps, Synder will record tax in the tax field (recommended for reporting).

If you need taxes included in the total amount only, leave Apply Taxes disabled. 

Note: Before enabling tax syncing in Synder, ensure that Sales Tax is enabled in QuickBooks Online.

Sales Tax Settings for Non-US QuickBooks Companies

For QuickBooks Online (Non-US) taxes are usually calculated in the payment processor or e-commerce platform. Synder records them directly in the accounting platform.

Tax Behavior

• Synder automatically detects whether the transaction is Tax Inclusive or Tax Exclusive
• This is determined based on the original transaction, not configured in Synder

Configuring Tax Settings in Synder

To access tax configuration, enable Apply Taxes in settings. Once enabled, additional tax options become available to control sales tax behavior.

Default Tax Code

The Default tax code acts as a fallback when Synder cannot find a matching tax rate in your accounting system.

Example scenario:

• Payment processor sends 8.25% tax
• Your accounting platform has no 8.25% tax code

Without a default tax code, the transaction will fail to sync.

With a default tax code set, Synder will apply the specified fallback tax code and the transaction will sync successfully. This setting prevents synchronization failures caused by missing tax rates.

Zero-Rated Tax Code

Synder applies the Zero-rated tax code when the tax amount from the payment processor equals $0. This approach records transactions with the correct tax classification, such as Exempt or Non-taxable.

Generic Tax Code

The Generic tax code allows you to apply a specified tax code to all transactions based on certain conditions. 

This option can be used in three ways:

1. Apply Generic Tax if a Transaction Contains Taxes
   If configured, Synder will ignore the tax rate from the payment processor and replace it with the selected generic tax code.
   This is useful when correcting incorrect tax calculations from the payment platform.
2. Apply Generic Tax if the Transaction Does Not Contain Taxes
   If enabled, Synder will apply a tax code only to transactions that do not include tax.
3. Apply Generic Tax to Shipping amount if the Transaction Contains Shipping
   This option applies a specific tax code to shipping amounts.

Expense Tax Settings

Some jurisdictions require businesses to pay tax on payment processor fees. Synder allows you to apply taxes to transaction fees recorded as expenses. The default, Xero-rated and Generic tax code settings are available for Expense tax settings as well.

For step-by-step instructions on how to configure taxes on fees, refer to this guide. 

Important Notes

• Synder cannot match tax codes by jurisdiction name when the tax percentage is identical across multiple jurisdictions.
  If a transaction includes 4% tax and you have 4% tax across several jurisdictions, Synder applies the first tax code alphabetically.
  
  Use Smart Rules to override the alphabetical logic.
  
• To override the alphabetical logic, you can use Smart Rules and assign the specific tax codes based on the shipping address/region.
  Check this guide for more details about applying taxes based on location via Smart Rules.
  
• Smart Rules apply one specific tax code per condition. If you have different tax codes for each region and the same tax rates across multiple jurisdictions, incorrect tax assignments may occur in some cases.
  For complex tax configurations, contact the support team to evaluate a custom approach.

• Synder cannot dynamically create tax codes based on city, country or district. All tax codes must already exist in the accounting platform.

FAQ

• Where do the tax codes in Synder settings come from?
  The tax codes available in Synder are pulled directly from your accounting platform.

If the required tax code is missing, you need to create it first in QuickBooks before selecting it in Synder.

• Do the changes to the tax settings apply to historical transactions?
  No. The setting only affects transactions synced after the adjustment. To apply it to previously synced transactions, rollback and resync them.
  
• Does the generic tax code apply to refunds?
  Yes. Does the Generic Tax Code Apply to Refunds?
• Yes. When Synder applies a generic tax code to the original transaction, it applies the same tax structure to the refund transaction synced to QuickBooks.
  
• Can I apply different generic tax codes for different payment platforms?
  Yes. If you have multiple payment integrations connected to Synder (for example, Stripe, PayPal, or Square), you can configure separate tax settings for each integration profile.

Reach out to Synder Team via online support chat or email with any questions you have – we are always happy to help you!