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Administrator Guide
Last Updated: 2023-06-23
Reference: Tax Options

Reference: Tax Options

The
Tax Option
 indicates how you want to record tax on transaction lines. Workday populates the tax option from:
  • The value of the
    Procurement Tax Option
     prompt in your company accounting details.
  • Transaction tax rules.

Tax Options

Option
Description
Calculate Self-Assessed Tax
Select this option when:
  • You pay the tax to the tax authority.
  • You want Workday to calculate the amount of tax that you owe to the tax authority.
Example: A supplier doesn't charge you VAT or GST.
Calculate Tax Due to Supplier
Select this option when:
  • You pay the tax to the supplier.
  • You want Workday to calculate the tax amount that you owe to the supplier.
  • The tax amount is partially or fully recoverable.
  • You report the tax amount to the tax authorities.
Example: A supplier charges you value-added tax (VAT) or goods and services tax (GST).
Enter Tax Due to Supplier
Select this option when:
  • You want to record the tax amount that the supplier charges you.
  • The tax amount is nonrecoverable.
  • You don't report the tax amount to the tax authorities.
You must have at least 1 line with a tax applicability that is taxable and enabled for allocation.
Example: A supplier charges you the United States Sales tax.
When you select this option:
  • You can enter the total amount of tax on the transaction header manually.
  • You can allocate the amount to the taxable lines that are eligible for allocation.
  • You can't select a tax code.
  • Workday doesn't create accounting for the tax amount.
  • Workday doesn't include the tax amount in the tax declaration reports.
  • Workday doesn't generate any
    Tax Rate Application
     or
    Line Tax Rate Application
     on the transaction.

Availability of Tax Options for Transaction Types

Transaction Type
Tax Options
Ad Hoc Bank Transactions
Workday can calculate how much of the extended amount on ad hoc bank transactions is tax.
Ad Hoc Payments
  • Calculate Self-Assessed Tax
    .
  • Calculate Tax Due to Supplier
    .
  • Enter Tax Due to Supplier
    .
Cash Sales
Workday can calculate the tax that you collect on cash sales.
Customer Contracts
Workday can estimate the tax that you collect on customer contracts.
Customer Invoices
Workday can calculate the tax that you collect on customer invoices.
Expenses
Workday can calculate how much of the extended amount on an expense line is tax.
When your organization doesn't require tax reporting on expense reports, you can hide the
Tax
 check box with the
Edit Tenant Setup - Financials
 task.
Manual Journals
You can enter the tax amount on manual journals.
Procurement Card Transaction Verifications
Workday can self-assess tax on procurement card transaction verifications.
Purchase Orders
  • Calculate Self-Assessed Tax
    .
  • Calculate Tax Due to Supplier
    .
  • Enter Tax Due to Supplier
    .
Requisitions
When you enable tax reporting on requisitions for a company, Workday can calculate the amount of tax on requisitions.
Supplier Invoices
  • Calculate Self-Assessed Tax
    .
  • Calculate Tax Due to Supplier
    .
  • Enter Tax Due to Supplier
    .