Creating OnCost™ Estimates
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      Understanding Estimate Tax Settings

      Learn how to customize tax settings for each individual construction estimate in ConstructionOnline™

      OnCost™ Estimating for ConstructionOnline™ delivers industry-leading construction estimating complete with advanced functions, flexible templates, adjustable tax settings, powerful tax tracking, and more. Construction professionals can create and manage all aspects of OnCost™ Estimates with ease––including Estimate Tax Settings. Customizable for each job entered into ConstructionOnline, Estimate Tax Settings determine the tax method, types, and rates that will apply to individual Items* within the Estimate. 

      Before discussing each individual component of Estimate Tax Settings, let's review how taxes can be customized in ConstructionOnline. As a reminder, taxes in ConstructionOnline can be set at either the Company or Project level. Because Estimate Tax Settings are dynamic, they will automatically load with any tax settings already set for the job––either Company Taxes or Project Taxes. 

      Company Taxes vs. Project Taxes

      Company Taxes, also known as Company Tax Settings, are company-wide taxes that can be applied to all financials within the Company Account. These high-level tax settings provide a standard tax structure for all company financials, which can be a huge time saver for companies that do not need to adjust taxes for each job. Alternatively, each job entered into ConstructionOnline can have individual custom tax settings, known as Project Taxes or Project Tax Settings. Settings from Project Taxes will also override any existing Company Tax Settings that may have already been applied to the job.

      Generally, there are two different scenarios that may play out during the initial setup of Estimate Tax Settings.

      1. If Project Taxes have been set for the job, Estimate Tax Settings will automatically load with settings from Project Taxes. Once Estimate Tax Settings are initialized, Estimate Tax Settings and Project Taxes will behave as one unit. Any changes to Estimate Tax Settings will also apply to Project Taxes; conversely, the same will happen if changes are made to Project Taxes. 
      2. If Project Taxes have not been set for the job, Estimate Tax Settings will automatically load with any settings from Company Taxes. Once Estimate Tax Settings are initialized, ConstructionOnline will set Project Taxes with information from Estimate Tax Settings. From then on, Estimate Tax Settings and Project Taxes will behave as one unit. Please note that any future changes to Estimate Tax Settings will apply to Project Taxes––not Company Taxes. 

      Estimate Tax Settings

      Now, let's break down each component of Estimate Tax Settings. Estimate Tax Settings are made up of several different components, including: 

      Tax Calculation Methods

      Tax calculation methods define when and how taxes are calculated within the Estimate, as the final price of an Estimate Item depends on the order of tax and markup calculations. ConstructionOnline provides three calculation methods that can be selected for use: 

      • Tax then Markup: taxes are applied prior to markup being calculated. This is the default option selected in Estimate Tax Settings.
      • Markup then Tax: markup is applied prior to taxes being calculated. 
      • Tax and Markup Separate: tax and markup are calculated independently. 

      Once a calculation method is chosen, it will be used as the tax calculation method for all Items with tax. 

      Country Settings

      With an ever-growing international client base, ConstructionOnline has added in specific Tax Settings for the United States, Canada, Australia, and the United Kingdom. Each region/country has its own default tax setup, which includes Tax Types. 

      • United States: includes Tax Types for Material and Service. Both Tax Types are broken out into Local, County, and State Subtypes. 
      • Canada: includes Tax Types for Goods and Services Tax (GST), Provincial Sales Tax (PST), and Harmonized Sales Tax (HST).
      • Australia: includes a Tax Type for GST. 
      • United Kingdom: includes Tax Types for Corporation Tax, Value Added Tax (VAT), and Construction Industry Scheme (CIS). 
      • Other: includes a Custom Tax Type. 

      Any country without specific Tax Settings in ConstructionOnline can edit one of the existing country options or customize the Other option to best reflect their country's taxes. Each one of the built-in Tax Types & Subtypes can be edited or removed, and additional Tax Types & Subtypes can be added to each option. Please note that none of the built-in Tax Types or Subtypes have been assigned a specific Tax percentage. 

      Tax Types

      Tax Types represent specific tax rates that can be selected for use within the Estimate. In addition to the default Tax Types provided by ConstructionOnline, new Tax Types can be added at any time within Estimate Tax Settings. Tax Types consist of two main parts: the Tax name and the Tax percentage. When a new Tax type is added, Company Users have the option to leave the Tax Type as a single entity or add individual Subtypes to the Tax Type. If Subtypes are added to the Tax Type, ConstructionOnline will automatically add up the total Tax percentage for the Subtypes and display it under the Tax Type's main Tax percentage. 

      Once Tax Types are saved in Estimate Tax Settings, Company Users can assign a specific Tax Type to individual Estimate Items, Change Orders, or Selections. ConstructionOnline also provides two additional Tax Types––Not Taxed and Tax Included––that can be selected for the Estimate Item, Change Order, or Selection. 

      Step-by-step instructions for applying tax within an Estimate can be found in Apply Tax to an Estimate Line. 

      Tax Subtypes

      Each Tax Type may be comprised of individual Tax Subtypes, which provide a detailed breakdown of each Tax Type's components. Each Tax Subtype is assigned its own name and Tax percentage; the total sum for all Tax Subtypes in a Tax Type will be the Tax percentage for the Tax Type. While Tax Subtypes are visible in Estimate Tax Settings, Tax Subtypes are hidden when a Tax Type is selected for use with an Estimate Item, Change Order, or Selection.

      However, Company Users can choose to display a breakdown of Tax Totals when generating an Estimate Proposal with ConstructionOnline's OnPoint™ Proposal Wizard. Selecting this option during Proposal customization allows Company Users to show the exact total for individual Tax Subtypes. More information about generating an Estimate Proposal can be found in Create an Estimate Proposal. 

      Additional Considerations

      Item Defaults

      In addition to Estimate Tax Settings, Company Users may also create default settings for new Estimate Items––known as Item Defaults. Once created, Item Defaults will apply a default Unit, Classification, Status, Markup Type, and Tax Type to each new Estimate Item. The Tax Type options listed in Item Defaults will pull from the list of Tax Types in Estimate Tax Settings. More information about Item Defaults can be found in Set Defaults within an Estimate. 

      Uniform tax for each Item in a Subcategory

      To save time applying tax, Company Users may select the option of "Uniform tax for each Item in a Subcategory". Found within Estimate Settings, this option will apply the same Tax Type, Tax %, and Tax Rate selected for one Item to all other Items within the same Subcategory. More information about this option can be found in Manage Estimate Settings. 

      Selections + Change Orders

      Thanks to the power of OnCost™ Estimating, Client Selections and Change Orders are automatically integrated with each Estimate in ConstructionOnline. This means that Estimate Tax Settings will also apply to Client Selections and Change Orders. When a new Selection or Change Order is added, Company Users can select Tax Types pulled from Estimate Tax Settings. 

      QuickBooks Considerations

      If your company has integrated with QuickBooks Online or QuickBooks Desktop, you can send Estimates over from ConstructionOnline to your QuickBooks account. However, there are a few factors that need to be considered before the Estimate is sent over.

      • If you are using QuickBooks Desktop, any tax included in the Estimate will be automatically sent over. 
      • If you are using QuickBooks Online, you have the option to include tax or not when the Estimate is sent over. If you do choose to include tax, any calculated tax will be added to the corresponding line total in QuickBooks Online. 

      No matter which version of QuickBooks your company is using, remember that taxes should be recorded in either QuickBooks or in ConstructionOnline—not both. If you try to account for taxes in both QuickBooks and ConstructionOnline, you will end up with double the amount of actual tax for your Estimate. 

      Ready to customize Estimate Tax Settings? Step-by-step instructions can be found in Edit Estimate Tax Settings. 

      *In a 3-Level Estimate, tax can only be applied to individual Estimate Items. In a 2-Level Estimate, tax can only be applied to individual Estimate Subcategories. Please be aware that 2-Level Estimates are a legacy option and are not compatible with the majority of ConstructionOnline's financial features. 

      HAVE MORE QUESTIONS?

      • Frequently asked questions (FAQ) regarding OnCost Estimating can be found in the FAQ: Estimating article. 
      • If you need additional assistance, chat with a Specialist by clicking the orange Chat icon located in the bottom left corner or visit the UDA support page for additional options.