Shopify's tax calculation

When opening your order in Cleverific without having made any changes, you may see an outstanding amount or refund due. This is usually due to the taxes being rounded.

Tax calculation in Shopify

Historically, tax amounts were rounded at the order level. This means that the total tax value was calculated by adding the prices of every item in an order, applying the tax rate to the order's subtotal, and rounding the result.

In April 2020, Shopify introduced new sales tax features for US and Canada tax jurisdictions. Using these new features, the total tax value is calculated by applying the tax rate to each line in the order, rounding the result, and then adding these subtotals together to arrive at the total value of the order.

Tax rounding in Cleverific

The change in calculation and rounding methodologies can result in small variances in your total tax amounts in Cleverific. This can result in the following problems:

1. Without having made any changes, Cleverific shows a balance due of only a few cents.
2. Without having made any changes, Cleverific shows a refund due of only a few cents.