Under Reports → VAT Overview you'll find your turnover and the matching VAT per period and per rate. This page explains how that VAT is calculated.
Prices always include VAT
The prices you enter for your services and products always include VAT. There is no setting to work with VAT-exclusive prices. Turnover in your reports is shown including VAT as well.
The basic calculation
Say you've sold something for €100.00 at 21% VAT. You might expect €21.00 of VAT. Salonized shows €17.36. That's because the €100.00 already includes VAT.
To get the amount excluding VAT, divide by 1.21:
€100.00 ÷ 1.21 = €82.64 (excluding VAT)
€100.00 − €82.64 = €17.36 (VAT)
That excl.-VAT amount is the basis: 21% of €82.64 is €17.36, and together that's €100.00 including VAT again.
Why is it sometimes a cent different?
VAT is calculated per unit, and then multiplied by the quantity — not over the line total. With larger quantities you may therefore see a few cents' difference from your own calculation.
An example with 2 units at €5.05 at 21% VAT:
| How Salonized calculates (per unit) | If you calculate on the line total |
Excluding VAT | €5.05 ÷ 1.21 = €4.17 | €10.10 ÷ 1.21 = €8.35 |
VAT | €5.05 − €4.17 = €0.88 per unit | €10.10 − €8.35 = €1.75 |
Both are mathematically defensible; Salonized consistently uses the first. Amounts are always rounded to whole cents.
What do discounts do to VAT?
This matters, because the two kinds of discount behave differently:
Type of discount | Effect on VAT |
Discount on a line — you change the price of a service or product | VAT is calculated on the reduced price, so the VAT goes down with it. |
Discount on the whole sale — an amount or percentage off the total | VAT stays unchanged. The discount comes off the amount payable, but is not spread across the lines or across the VAT rates. |
That's why an invoice reads: subtotal excl. VAT + VAT − discount = total.
0% VAT and "No VAT" are not the same
VAT zero (0%) — a genuine 0% rate. These lines do appear in the VAT breakdown on your receipt, showing 0% as the rate.
No VAT — a rate with no percentage at all. These lines are left out of the VAT breakdown entirely.
Gift cards, prepaid cards and tips
Gift cards: no VAT is charged when you sell one. The VAT falls when the gift card is redeemed against services or products.
Prepaid cards: the other way round — VAT falls when the card is purchased, and not again when it's used.
Tips: no VAT is calculated on tips.
Managing VAT rates
You manage your rates under Settings → VAT rates, which requires Administrator permissions. When your account is created you get four rates: VAT standard (your default), VAT reduced, VAT zero (0%) and No VAT. Standard and reduced follow your country — for example 21% and 9% in the Netherlands, 21% and 6% in Belgium, 19% and 7% in Germany, 20% and 10% in France.
Changing a percentage? We create a new rate and deactivate the old one. Invoices already created keep the percentage that applied at the time, so your history doesn't change. Your default rate cannot be deleted.
Working in Belgium?
For cash payments Salonized rounds the total to the nearest 5 cents. That rounding does not change the VAT — only the cash amount you settle.
Do you have any further questions? Please get in touch!