---
title: How to set taxes on your invoices
description: "Learn how to set up and apply taxes like sales tax, VAT, or service tax on your invoices and estimates in OneSuite. This guide covers how to create reusable tax rates, apply multiple taxes per invoice, and manage region-specific billing needs with ease."
url: "https://help.onesuite.io/docs/set-taxes-on-your-invoices/"
updated: "2026-10-01"
category: "Invoices & Payments"
---

# How to set taxes on your invoices

Taxes in OneSuite are rates you save once, such as sales tax, VAT or service tax, and then charge on invoice lines, with an optional second tax on top. Setting them up in one place means every invoice calculates tax the same way, and you never retype a percentage.

**In this guide you'll learn how to:**

- Create your tax rates in **Configure**
- Choose the taxes a new invoice starts with
- Charge a second tax, simple or compound
- Apply, change or remove taxes on one invoice
- Set a default tax on a project

## How to create your tax rates

You create tax rates in **Invoices**, **Configure**, **Taxes**, under **Your rates**.

1. Click **Invoices** in the sidebar.
2. Click the **Configure** tab.
3. Click **Taxes** in the Configure rail. It sits in the **Invoicing** group.
4. Under **Your rates**, click **Add a rate**.
5. Enter a **Rate name**, for example `VAT (UK)` or `Sales Tax (CA)`. This is the name your client sees on the invoice.
6. Enter the **Percentage**, for example `10` for 10%.
7. Repeat for every rate you charge.
8. Click **Save changes**.

The save bar appears as soon as you change something. Click **Discard** to undo your changes instead. If a rate has a name but no percentage, or a percentage but no name, OneSuite blocks the save with **Give every rate a name and a percentage.**

To remove a rate, click its trash icon (**Delete rate**), then click **Save changes**. The rates you save are available on every invoice and on each line.

![Invoices, Configure, Taxes page with two rates under Your rates and Tax 1 and Tax 2 chosen under Applied to new invoices](https://help.onesuite.io/wp-content/uploads/2026/10/set-taxes-on-your-invoices-1.webp)

## How to choose the taxes a new invoice starts with

You pick the starting taxes under **Applied to new invoices** on the same **Taxes** page.

1. Open **Invoices**, **Configure**, **Taxes**.
2. Under **Tax 1**, choose one of your rates.
3. Under **Tax 2**, choose a second rate. Leave it as **None** if you only charge one tax.
4. If you use two taxes, choose how they combine: **Simple** or **Compound**.
5. Click **Save changes**.

These choices are copied onto an invoice when it is created, and you can still change them on each invoice. If you rename or re-rate a rate that Tax 1 or Tax 2 uses, the slot is updated in the same save, so the two stay in step. The **New invoice defaults** page shows the same choices read-only, with a **Manage taxes** link back to this page.

## How do simple and compound taxes differ?

Simple charges both taxes on the pre-tax amount, while compound charges Tax 2 on the subtotal plus Tax 1.

| Mode | How Tax 2 is worked out | Example: 1,000 subtotal, Tax 1 at 10%, Tax 2 at 5% |
| --- | --- | --- |
| **Simple** | Both taxes are charged on the pre-tax amount. | Tax 1 = 100, Tax 2 = 50, total tax 150 |
| **Compound** | Tax 2 is charged on top of Tax 1, on the subtotal plus Tax 1. | Tax 1 = 100, Tax 2 = 55, total tax 155 |

Use compound only when your tax authority tells you to charge one tax on top of another.

## How to apply taxes on an invoice

You apply taxes in the totals area of the invoice editor, below the line items.

1. Open a draft invoice, or create one with **New invoice**.
2. Add your line items.
3. Next to **Tax** in the totals, open the rate picker (**Choose tax**) and pick a rate. If the list says **No taxes set up**, create a rate in **Configure** first.
4. Click **Apply to all** to tick **Tax** on every line.
5. To charge a second tax, click **+ Enable second tax**, pick a rate for **Tax 2**, and click its **Apply to all**.
6. Under **Taxation mode**, choose **Simple** or **Compound**.
7. Check the totals, then save the invoice.

Each line has its own **Tax** and **Tax 2** checkbox, so you can leave a line untaxed by unticking it. To drop the second tax, click the cross beside **Tax 2** (**Remove second tax**). To take tax off the whole invoice, open the **Charges** group in the editor rail and switch off **Apply tax**.

Estimates carry **Tax** and **Tax 2** columns on their lines in the same way.

![Invoice editor totals area with Tax and Tax 2 rates chosen and Taxation mode set to Compound](https://help.onesuite.io/wp-content/uploads/2026/10/set-taxes-on-your-invoices-2.webp)

## How to set a default tax on a project

You set a project's default tax in the **Invoice values** card on the project's **Billing** tab.

1. Click **Projects** in the sidebar and open the project.
2. Click the **Billing** tab.
3. In **Invoice values**, enter a **Tax** percentage between 0 and 100.
4. To add a second tax, click **Enable second tax** and enter the **Second tax** percentage, also between 0 and 100.
5. To take the second tax away, click **Disable second tax**.

There is no save button on the **Billing** tab. Each change saves on its own, and the card shows **Saving…** and then **Saved**. These values are what a new invoice for this project starts from, and every one of them can still be changed on the invoice itself. You need permission to edit the project to change them.

## Where each tax setting lives

| Where | Setting | What it controls |
| --- | --- | --- |
| **Configure**, **Taxes**, **Your rates** | **Rate name**, **Percentage** | The list of rates you can pick on any invoice |
| **Configure**, **Taxes**, **Applied to new invoices** | **Tax 1**, **Tax 2**, **How the two combine** | The taxes a new invoice starts with |
| Invoice editor, totals | **Tax**, **Tax 2**, **Taxation mode**, **Apply to all** | The taxes on this one invoice |
| Invoice editor, **Charges** | **Apply tax** | Whether this invoice charges tax at all |
| Project, **Billing**, **Invoice values** | **Tax**, **Second tax** (0 to 100%) | The tax a new invoice for this project starts from |

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## FAQs

### How do I add VAT to an invoice in OneSuite?

Create a rate called `VAT` in **Invoices**, **Configure**, **Taxes**, then pick it next to **Tax** in the invoice editor and click **Apply to all**. If you want every new invoice to start with VAT, choose it as **Tax 1** on the **Taxes** page.

### Can I charge two taxes on one invoice?

Yes. Click **+ Enable second tax** in the invoice editor, pick a rate for **Tax 2**, and choose **Simple** or **Compound** under **Taxation mode**. You can also make two taxes the default by setting both **Tax 1** and **Tax 2** in **Configure**.

### How do I make one line item tax-free?

Untick that line's **Tax** checkbox, and its **Tax 2** checkbox if you charge a second tax. The other lines stay taxed.

### Can I use a different tax rate for one project?

Yes. Open the project's **Billing** tab and set **Tax** and **Second tax** in **Invoice values**. New invoices for that project start from those percentages instead of your business defaults.

### My older invoice shows a different tax layout. How do I change it?

Click **Switch to Tax / Tax 2** in the invoice's totals area. It replaces the older tax rows with **Tax** and **Tax 2** and per-line checkboxes.

### Can I just add tax as a line item instead?

You can, but OneSuite then treats it as an ordinary charge, not a tax. Using a tax rate keeps the tax on its own row, works it out from the lines you tick, and updates it when the amounts change.

## What to do next

**Finish your invoice setup:** Choose your letterhead, wording and new invoice defaults in [Invoice Settings & Customization](https://help.onesuite.io/docs/invoice-settings-customization/).

**Set project defaults:** Add tax, due dates and discounts per project with [How to Set Up Project Billing and Budgets](https://help.onesuite.io/docs/how-to-set-up-project-billing-and-budgets/).

**Send an invoice:** Put your tax rates to work in [Create One-time Invoices](https://help.onesuite.io/docs/create-one-time-invoices/).