Skip to main content

Redistribute Zuora Tax Rounding Differences

Zuora

Redistribute Zuora Tax Rounding Differences

Overview

You can choose whether to redistribute the tax rounding differences between the group level and item level when you use Zuora Tax for tax calculation. To access this feature, click your username at the top right and navigate to Billing > Define Billing Rules, then change the Redistribute Zuora Tax rounding differences setting. This setting is set to No by default, indicating that Zuora does not redistribute the tax rounding differences between the group level and item level.

If this billing rule is set to Yes, invoice items in one invoice are grouped based on the same tax code, tax name, and tax rate, and the total tax amount is calculated at the group level and the item level. The tax rounding differences between the group level and item level are redistributed to the corresponding items.

This billing rule does not apply to the invoice items that do not use Zuora Tax for tax calculation.

Example scenario

Imagine a scenario where:

  • A tax-inclusive invoice contains two invoice items with the same tax rate, tax code, and tax name.
  • The currency of the invoice is USD and the default tax rounding rule is used, so the tax amount is rounded to two decimal places.
  • The Redistribute Zuora Tax rounding differences billing rule is set to Yes.

In this case, the tax rounding difference redistribution is as listed in the following table.

Invoice/
Invoice item
Amount with tax  Tax rate Tax amount after rounding Tax amount after redistribution
Invoice item 1 $30 0.08 $2.22 $2.22
Invoice item 2 $50 0.08 $3.70 $3.71
Item-level total $80   $5.92 $5.93
Group-level total $80   $5.93 $5.93
Tax rounding difference that is redistributed $0.01