topic Re: Public Mobile Doesn't Calculate Taxes Correctly in Get Support

Public Mobile Doesn't Calculate Taxes Correctly

Nezgar — Tue, 25 Oct 2022 22:42:47 GMT

Anyone else notice that Public Mobile doesn't calculate taxes correctly? I tested this with a small payment to my account:

Big fat rounding error here... As we can clearly see, 1.08 + 0.05 + 0.06 should equal $1.19, not $1.20.

PST/GST should be rounded separately before adding: You only get 1.20 if you round by adding PST+GST and then round .. 1.08 x 1.11 = 1.1988 (Which would then round up to $1.20, which is incorrect). Indeed credit card transaction history also shows a $1.20 transaction, not $1.19, so it's not just cosmetic.

Anyhow...Not a factor for GST and HST only provinces/territories, but technically Public Mobile is pocketing a penny here and there.... Seems petty to open a ticket to report this but it bugs me when big companies fail at basic accounting. I wonder if this is also an issue for Auto-Pay?

Re: Public Mobile Doesn't Calculate Taxes Correctly

hTideGnow — Tue, 25 Oct 2022 22:57:22 GMT

HI @Nezgar I think the guildline from Taxation Canada now is to calculate the tax rate as a total rate when they collect from customers, that's why it is using the term HST now for BC and Ontario (sorry, not sure about the situation for other provinces) So, a calculation of $1.08 * 1.11 is the correct way under HST

It is only for reporting purpose they break it down in to GST and PST for the customers

Re: Public Mobile Doesn't Calculate Taxes Correctly

Nezgar — Tue, 25 Oct 2022 22:57:48 GMT

@hTideGnow wrote:
I think the guildline from Taxation Canada now is to calculate the tax rate as a total rate when they collect from customers, that's why it is using the term HST now. So, a calculation of $1.08 * 1.11 is the correct way

Oh really? I have some research to confirm if I've had the wrong understanding of this all along.

Re: Public Mobile Doesn't Calculate Taxes Correctly

hTideGnow — Tue, 25 Oct 2022 23:00:20 GMT

HI @Nezgar this is what I understand for Ontario and BC. It is replaced by HST (13% and 11%)

https://www.canada.ca/en/treasury-board-secretariat/services/reporting-government-spending/what-we-are-doing/transition-harmonized-sales-tax-ontario-british-columbia-winding-down-provincial-sales-tax-ontario-british-columbia.html

Retails are ok to simply tax it by 11% and 13% instead of breaking it into 2 separate calculations.

Re: Public Mobile Doesn't Calculate Taxes Correctly

Nezgar — Tue, 25 Oct 2022 23:02:04 GMT

So supposedly this is an "official" Government of Canada sales tax calculator, and it returns $1.19 as well: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-which-rate/calculator.html

Re: Public Mobile Doesn't Calculate Taxes Correctly

Nezgar — Tue, 25 Oct 2022 23:29:04 GMT

@hTideGnow wrote:
HI @Nezgar this is what I understand for Ontario and BC. It is replaced by HST (13% and 11%)

https://www.canada.ca/en/treasury-board-secretariat/services/reporting-government-spending/what-we-are-doing/transition-harmonized-sales-tax-ontario-british-columbia-winding-down-provincial-sales-tax-ontario-british-columbia.html

Retails are ok to simply tax it by 11% and 13% instead of breaking it into 2 separate calculations.

True you must not separately report federal & provincial parts for provinces that use HST, but I'm in a province with separate GST/PST. The article linked from 2010 includes British Columbia back during their brief time with HST - they're back to separate GST/PST since then.

Re: Public Mobile Doesn't Calculate Taxes Correctly

hTideGnow — Tue, 25 Oct 2022 23:29:05 GMT

HI @Nezgar Look like you are right

But I guess even break it down into GST/PST separately, it depends on the decimal place to round off

Let us know if you are going to open ticket with PM and let us know what they say 🙂

Re: Public Mobile Doesn't Calculate Taxes Correctly

wetcoaster — Tue, 25 Oct 2022 23:39:05 GMT

@hTideGnow

Ok, my small business is collecting and remitting BC PST and GST, and you got me going for a second there - it sounded like I missed a major memo of updated information in the past four weeks...

The link you posted is providing HST information from 2010... BC has gone back to separate PST and GST in spring 2013. Oh, and general BC PST being 7%, HST would be 12% and not 11%...

My accounting program is calculating both sales taxes separately and if there's any rounding, it happens at the final sum. I'm not an accountant but that's how I understand the rules?

Re: Public Mobile Doesn't Calculate Taxes Correctly

CountyDownIeUk — Tue, 25 Oct 2022 23:45:21 GMT

BC had GST and PST then to the infamous HST and we voted it (HST) out. We are back to GST and PST side by side. Not sure ant more but it is possible that some provinces charge PST on the GST amount. But never the less the example given....the addition is incorrect.

Re: Public Mobile Doesn't Calculate Taxes Correctly

CountyDownIeUk — Tue, 25 Oct 2022 23:49:12 GMT

Here is what PM did...$1.08 + (6% + 5% = 11%) = $1.1988 or $1.20.

Re: Public Mobile Doesn't Calculate Taxes Correctly

CountyDownIeUk — Tue, 25 Oct 2022 23:51:22 GMT

PM is INCORRECT!

Re: Public Mobile Doesn't Calculate Taxes Correctly

dust2dust — Tue, 25 Oct 2022 23:51:21 GMT

I'm not seeing the problem either

1.08 * .05 = .054
1.08 * .06 = .0648

.054 + .0648 = .1188

1.08 + .1188 = 1.1988 round to the 10's = 1.20

1.08 * .11 = .1188
1.08 + .1188 = 1.1988

1.08 * 1.11 = 1.1988

So it's an interesting reference that the government site strips the other digits.

Re: Public Mobile Doesn't Calculate Taxes Correctly

CountyDownIeUk — Wed, 26 Oct 2022 00:01:36 GMT

The question is, each tax supposed rounded to 2 points and then added? Perhaps the software is sloppy?

Some items in BC only have 1 tax and would be rounded accordingly.

1.774 = 1.77

1.775 = 1.78.

Re: Public Mobile Doesn't Calculate Taxes Correctly

Nezgar — Wed, 26 Oct 2022 00:04:23 GMT

Each tax should be rounded to the nearest cent before adding them together.

PM is adding them together, then rounding to the nearest cent once, which can result in a rounding error (and does as per my example)

Re: Public Mobile Doesn't Calculate Taxes Correctly

dust2dust — Wed, 26 Oct 2022 00:31:24 GMT

Interesting corroboration from Shopify.

https://help.shopify.com/en/manual/taxes/canada/canada-tax-manage#tax-rounding

Re: Public Mobile Doesn't Calculate Taxes Correctly

hTideGnow — Wed, 26 Oct 2022 15:03:54 GMT

So, the line item calculation is in fact worse