How Taxes Are Calculated

Direct Ordering calculates tax by applying it to each menu item and each modifier separately, rather than to the order total. Each item's tax is rounded, so the sum of the per-item taxes is rarely identical to the tax that would result from applying the rate to the order total. This article explains how that calculation works.

How the Calculation Works

Tax is applied to each menu item and each modifier individually, and each amount is rounded before being summed. For example, an 8.875% tax rate applied to the following order is calculated as shown:

Applying the tax rate to the order total instead would produce $2.01. When individual taxes or overrides apply to certain items or modifiers, the same rules apply: tax is applied to each item individually, rounded to two decimal places, and then added to the total.

Every POS system calculates tax in its own way and typically allows a small margin of difference, usually up to 10 cents per order. Significant discrepancies can be reported to Checkmate Support for review. For more on how amounts are rounded, see How Rounding Works.