# Setting Up Taxes in WooCommerce

> **Source video:** https://www.youtube.com/watch?v=0aPtye5ba4A

This video explains how to set up and collect taxes in WooCommerce. You'll learn how to enable the tax feature, choose whether prices include tax, decide what the tax calculation is based on, configure tax classes, and control how prices and tax totals are displayed.

> Most businesses have legal obligations to pay taxes. Research what is required in your country, state, and jurisdiction before configuring tax settings.

## Enabling and Finding the Tax Settings

1. Go to **WooCommerce → Settings → Tax**.
2. If you don't have a **Tax** tab, jump to the **General** tab and enable taxes there.

## Tax Options

### Prices Entered With Tax

This determines how you enter product prices later when creating products.

- **Yes, I will enter prices inclusive of tax**: all your product prices already include taxes.
- **No, I will enter prices exclusive of tax**: product prices are set excluding taxes, and taxes are calculated in addition to the price.

### Calculate Tax Based On

Choose between:

- **Customer shipping address**
- **Customer billing address**
- **Shop base address**

> The address field needs to be filled in for taxes to calculate, especially if you have different tax rates between locations.

### Shipping Tax Class

- **Shipping tax class based on cart items**: for most stores this can be left as is. Tax classes and their costs are based on the items in the cart — for example, if a product is set as a reduced-rate product, the reduced rate tax applies.
- If your tax jurisdiction requires otherwise, choose a different tax class appropriately.

### Rounding

- If your tax laws require rounding to be done last, when the sub-total is calculated, enable the **Rounding** option. Otherwise taxes are rounded per line.

### Additional Tax Classes

- These are additional classes you can use outside of the default **Standard rates**. In most cases you'll use the standard rates class.
- If you sell goods that require a different tax class, add those classes here. **Reduced rate** and **Zero rate** classes are added for you to start.
- Each class you have is listed at the top under the **Tax** tab. Selecting a class takes you into its tax rates, shows the current rates, and lets you set up new ones for that class.

### Display Prices in the Shop

- Determines how prices are displayed in your store, excluding the cart and checkout pages. Choose **Including tax** or **Excluding tax**.

### Display Prices During Cart and Checkout

- A separate control, like **Display prices in the shop**, to show tax-inclusive or tax-exclusive prices on the cart and checkout pages.

### Price Display Suffix

- Add a suffix that shows after your product prices, for example "including sales tax," to help explain your pricing.

### Display Tax Totals

- Choose to display tax totals as a **Single total** (one tax charge) or **Itemized** (showing each applicable tax rate).

For examples of how to add tax rates and common setups, see the WooCommerce tax documentation.