Expense Amount and Tax Calculation
The system clearly separates the base amount you enter when creating an expense from the automatically calculated tax value, so the amount you entered stays unchanged, while its related taxes are calculated separately and clearly. This guide explains this calculation logic in detail.
Key Fields in the Expense Form
- Amount: The field you enter manually — it’s editable, and is used as the reference for calculating all taxes related to the expense.
- Tax: A read-only field, automatically calculated based on the selected taxes.
- Total with tax: Equals the Base Amount plus any exclusive (non-included) taxes.
Important: The system never modifies the amount you entered manually for any tax-related reason — the “Amount” stays fixed as you entered it, while taxes are calculated around it only.
How Is Inclusive Tax Calculated?
When you select a tax of type “Inclusive,” it means the tax value is already included within the base amount you entered, and is not added on top of it. It’s calculated using the following formula:
Tax Amount = Base Amount × Rate ÷ (100 + Rate)
In this case, the “Total Due” remains equal to the base amount itself, with no increase.
How Is Exclusive Tax Calculated?
When you select a tax of type “Exclusive,” it means the tax value is added on top of the base amount. It’s calculated using the following formula:
Tax Amount = Base Amount × Rate ÷ 100
Total Due = Base Amount + Tax Amount
Important Rule: Each Tax Is Calculated Independently
When more than one tax is applied to the same expense, each tax is calculated separately based on the original “Amount” only — not on the result of another tax added earlier. This ensures calculation accuracy regardless of how many taxes are applied or in what order.
Example
If you enter a base amount of 500, with the following two taxes applied:
- Tax 1: 5% Inclusive.
- Tax 2: 10% Exclusive.
The results would be as follows:
| Item | Value |
|---|---|
| Base Amount | 500 |
| Tax 1 (Inclusive) | 23.81 |
| Tax 2 (Exclusive) | 50.00 |
| Total Calculated VAT | 73.81 |
| Total Due | 550.00 |
Instant Calculation Updates
All values (Calculated VAT and Total Due) update instantly and automatically as soon as you change the base amount or adjust the applied tax settings, with no additional action needed on your part.
Note for Scanned E-Invoicing (SAR) Expenses
If an expense is scanned using the “Scan Expense Using AI” feature on a Saudi account, and the system is unable to automatically determine the applied tax type from the scanned receipt, it takes the total amount only and leaves the tax field empty, so you can update it manually later with the correct tax.