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Hi i am not able to setup the tax for freight (weighted average tax calculation)

edited May 8, 2026 5:45AM in Tax & Global 1 comment

The tax on the freight line should be calculated based on the weighted average tax rate derived from all item lines in the transaction for both AR and AP invoices

For example:

Line

Amount

Tax Rate

Line 1

100

22%

Line 2

50

4%

Freight

7

Weighted Average Tax

Weighted average tax rate calculation:

Weighted Average Tax Rate=(22%×100/150)+(4%×50/150)

Freight tax amount calculation:

Freight Tax=7×(22%×100/150+4%×50/150)

Accordingly, the freight tax should not be calculated using a standard or fixed tax rate. Instead, it must be proportionately derived based on the weighted average of the tax rates applicable to all item lines in the order/invoice.

Thankyou

N.Prasanna

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