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Administrator Guide
Last Updated: 2023-06-23
Concept: Transaction Tax Account Posting Rules

Concept: Transaction Tax Account Posting Rules

You might post tax amounts to a liability, asset, or expense account depending on whether:
  • You're collecting or paying taxes.
  • You can recover a portion of this tax amount.
You can set up transaction tax account posting rules that define the ledger accounts where Workday posts transaction tax based on dimensions such as:
  • Tax Type
  • Tax Recoverability
  • Tax Code
  • Tax Applicability
Example: To post the Canadian QST and GST to 2 different ledger accounts, you set up a transaction tax rule with a condition on the
Tax Rate
 dimension.
To set up transaction tax account posting rules, access the
View Account Posting Rule Set
 report and edit these posting rules:
  • Transaction Tax
  • Transaction Tax on Payment

Tax Recoverability Type

The
Tax Recoverability Type
 dimension makes it easier for you to develop transaction tax account posting rules for recoverable and nonrecoverable tax.
Use these guidelines when you develop your transaction tax account posting rules:
  • Since recoverability doesn't apply to these documents, Workday evaluates their
    Tax Recoverability Type
     as
    Non Recoverable
    :
    • Customer invoices.
    • Cash sales.
    • Ad hoc bank transactions of type
      Deposit
      .
  • When the tax recoverability of a transaction is
    Non-Recoverable + Allocation
    , Workday automatically allocates the nonrecoverable tax amount to the spend ledger account. You don't need to set up tax account posting rules to post the nonrecoverable portion of tax to the spend ledger account.
  • When the tax recoverability of a transaction is
    Non-Recoverable + no Allocation
    , you can post the nonrecoverable tax amount using a condition where:
    • The
      Tax Recoverability Type
       dimension has a value of
      Non Recoverable
      .
    • The
      Tax Type
       dimension has a value of
      Tax Paid
       or
      Tax Self-Assessed
      .

Tax Type

You can configure tax account posting rules on the
Tax Type
 dimension to define a ledger account where Workday posts the transaction tax paid, collected, or self-assessed on these documents:
Document Type
Tax Type
  • Ad Hoc Bank Transaction of type
    Withdrawal
  • Ad Hoc Payment
  • Expense Report
Tax Paid
  • Ad Hoc Bank Transaction of type
    Deposit
  • Cash Sale
  • Customer Invoice
Tax Collected
  • Ad Hoc Payment
  • Procurement Card Verification
Tax Self-Assessed
Supplier Invoice
Tax Paid
 or
Tax Self-Assessed