How to calculate prices with taxes included in final price

This article will explain the process of how to setup LilYPad to support pricing of products that have taxes included in the final price.

For this example, we will assume we are setting up a product to be priced at $25 after taxes of 7%.

1. Enable 4 Decimal Place Pricing

In LilYPad, go to Admin > Location Settings and set "4 Decimal Place Prices?" to Yes

2. Calculate the price of the product BEFORE taxes

The formula for this is:

FINAL PRICE / (1 + LILYPAD TAX RATE)

In a calculator, divide the final price (25) by 1.00 plus the LilYPad tax rate (0.07). This will give you the price before taxes are calculated. Round the decimal points to 4 places, rounding up on the 4th.

For our example the formula and result would be: 25 / 1.07 = 23.3645

3. Enter the Price

In the product details enter the price before tax into the Price field of the product (making sure the tax rate is set to the proper amount used in the calculation. In our example this will be 23.3645

4. Set the Display Price

In the product details set the Display Price to the final price AFTER taxes. In our example this will be 25