# How to set up a tax group

> Published: 2026-06-18
> Updated: 2026-07-09
> Category: Manage
> Canonical: https://finalpos.com/help/set-up-a-tax-table

To set up a tax group, go to Settings → Taxes and choose Add Tax Group. Name it, then add one or more tax rates (each a name and a percentage). Optionally make a rate compounding or set a different rate per outlet. Assign the tax group to products so tax is calculated at checkout.

## Key takeaways

- Tax groups are set up under Settings → Taxes.
- A tax group combines one or more tax rates that apply together.
- Each rate has a name and a percentage (for example State Sales Tax, 10.25%).
- Turn on Compound for a rate so it's applied on top of the non-compounding rates (tax-on-tax).
- Use the same rate for all outlets, or set a different rate per outlet; then assign the group to products.

## What is a tax group?

A tax group combines one or more **tax rates** that should be applied together. You assign a tax group to each product, and the system calculates the tax at checkout. Tax groups let you match the rates you're required to charge — for example a state or provincial sales tax, or a combined federal-plus-regional tax — and apply them consistently across your catalog and outlets.

## How to set up a tax group

1. In the Merchant Hub, go to **Settings → Taxes**.
2. Choose **Add Tax Group**, give it a **Name** (for example, *Standard Tax* or *Reduced Rate*), and create it.
3. Choose **Add Tax Rate** and enter a **Name** (for example, *State Sales Tax* or *VAT*) and the **Rate (%)** (for example, 10.25). Add each rate that should apply together, in the order you want them applied — reorder rates within the group if the sequence matters (for example when compounding). A rate you've already created can be reused across multiple tax groups, so you define it once and add it wherever it's needed.
4. **Compounding (optional):** turn on **Compound** for a rate so it's applied **on top of** the other (non-compounding) rates — i.e. tax on tax.
5. **Per-outlet rates (optional):** for a rate, either **use the same rate for all outlets** or **set a different rate per outlet**.
6. **Save** the tax group, then **assign it to your products** so tax is calculated at checkout.

## FAQ

**Q: What's the difference between a tax group and a tax rate?**
A: A tax rate is a single named percentage; a tax group combines one or more rates that apply together and is what you assign to a product.

**Q: What does Compound do?**
A: A compounding rate is applied on top of the other non-compounding rates (tax on tax), rather than on the base amount alone.

**Q: Can a rate differ by location?**
A: Yes — for a rate you can set a different rate per outlet instead of using the same rate everywhere.

**Q: How does tax get applied to a sale?**
A: Assign the tax group to a product; the tax is then calculated at checkout.