VAT Categories Explained (Standard, Zero, Exempt)

VAT for Shop Owners

South Africa (and many other regions) use a Value Added Tax (VAT) system. Our POS calculates this automatically.

The Three Categories

1. Standard Rated (15%): Most goods and services.
2. Zero-Rated (0%): Essential goods like basic food items (bread, milk, eggs).
3. VAT Exempt: Services not subject to VAT (e.g., certain educational services).

How it Works in the POS

When you set up a product, you assign a VAT Category. When a sale is made:

• The system calculates the VAT portion.
• This is logged and summed in the Accounting Dashboard.

Example

If you sell a product for R100 at 15% VAT:

• The VAT component is R13.04 (100 / 1.15 * 0.15).
• This R13.04 is your liability to pay to SARS.

Always consult a tax professional for specific advice.