Configure tax collection

Set up tax rates and automatic tax calculation to stay compliant. Payment for Stripe makes it easy to collect the right amount of tax on every transaction.

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processed since 2015
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How to get started

Follow these 4 simple steps to get up and running.

1

Enable tax collection in Settings

Go to Settings > Taxes and toggle on tax collection. You can choose to apply taxes automatically to all charges or add them manually per transaction.

2

Create your tax rates

Tap "Add Tax Rate" to create rates for your location. Enter a name (like "Sales Tax" or "VAT"), the percentage, and whether it's inclusive or exclusive. You can create multiple rates for different jurisdictions.

3

Apply taxes to charges

When creating a charge, your default tax rate is applied automatically. You can also tap the tax field to select a different rate, apply multiple rates, or remove tax for tax-exempt transactions.

4

Review tax reports

Track your collected taxes in your Stripe Dashboard under Reports > Tax. Payment for Stripe records all tax details with each charge, making it easy to reconcile and file your tax returns.

Common questions

What's the difference between inclusive and exclusive tax?
Exclusive tax is added on top of the price (e.g., $100 + 10% tax = $110 total). Inclusive tax is already included in the price (e.g., $100 total with 10% tax means $90.91 + $9.09 tax). Most US businesses use exclusive pricing, while many European businesses use inclusive pricing with VAT.
Can I set up VAT for European customers?
Yes! Create a tax rate with your VAT percentage and mark it as inclusive if you display VAT-inclusive prices. You can create multiple VAT rates for different EU countries if needed. All VAT details are recorded in Stripe for your records.
How do I handle tax-exempt customers?
When creating a charge for a tax-exempt customer, simply tap the tax field and select "No Tax" or remove the applied tax rate. The charge will be processed without any tax added.
Does Payment for Stripe calculate tax automatically based on location?
The app applies your configured tax rates but doesn't automatically determine rates based on customer location. For automatic tax calculation based on address, consider enabling Stripe Tax in your Stripe Dashboard, which integrates with Payment for Stripe.

Related guides

App Configuration

Customize all your app settings including default tax behavior.

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Product Catalog

Set up products with tax rates already configured.

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Invoices

Send professional invoices with itemized tax breakdowns.

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