Cut cart abandonment and boost customer satisfaction with transparent, tax-inclusive pricing. Support your growth across borders with upfront, all-in prices and streamline your users’ checkout experience for higher conversions.
This feature is included in ThriveCart Pro+ plan and requires Stripe Connect+ to be enabled as the payment processor within product settings.
ThriveCart’s sales tax support, either using our own Simple Sales Tax System, or our optional integration with Quaderno, allows vendors to set where tax is added (exclusive) or included (inclusive) of their product price.
This is available to users with Pro+ and where Stripe Connect+ is enabled on a product.
It will also work with PayPal enabled on your product, but you will need to have Stripe Connect+ enabled on the product as well to enable the functionality.
💡 Reduce cart abandonment and increase trust with tax-inclusive pricing. Show your customers the final price upfront to streamline checkout and drive more conversions—especially in international markets.
What does this mean?
Currently, tax is applied to your product price if applicable. This potentially results in different customers paying different amounts based on where they’re located.
It also means your pricing may not be consistent throughout your offer and funnel – your sales page could list one price, but when they arrive at checkout, they see another (with tax added).
Commissions to affiliates could vary slightly, as the net amount from customers could be different based on their location.
Tax-inclusive pricing is calculated as:
[Gross Price] = [Product Price] / (1 / (1 + [Tax Rate]))
So for the UK:
$100 = [Product Price] / (1 / 1.2)
$83.33 = Product Price
$16.67 = Tax
For Germany:
$100 = [Product Price] / (1 / 1.19)
$84.03 = Product Price
$15.97 = Tax
So you see differing gross profit numbers, but importantly, your customers see a consistent price ($100).
This means that if you’re sending your prospects from a sales page to your ThriveCart checkout page, you can say $100 on that sales page without worrying about them seeing a different (higher) price after tax is added.
When your prospects come from places like Europe, where they usually expect tax to be included, keeping this consistency can mean a big boost in conversions.
We will be rolling out an update soon that will allow you to set tax-inclusive pricing in specified regions only, so you can show exclusive pricing in regions like the US and inclusive pricing in regions like the EU.
Example:
A customer in the UK purchases your digital product for $100. Their local VAT of 20% ($20) is applied, and the customer is charged a total of $120. However, a customer from Germany purchases and they’re charged $119 because their local tax rate is 19%. In both cases, you, the vendor would technically receive $100 for each customer.
Across the EU, tax-inclusive pricing is more common, where the customer is given a ‘total’ price upfront, then any related taxes are reduced from that total amount. This means that the vendor (you) could technically earn different amounts based on the customers location, but is more standard across the EU.
Using the same examples above, a customer from the UK would pay $100. $16.67 would be tax, leaving you with $83.33. For the German customer buying the $100 product, $15.97 would be tax, leaving you with $84.03
Affiliate commissions: based on where the referred customer is from, percentage based commission is based on the NET amount you receive from the customer. In the above examples again using a 50% commission rate, the affiliate referring a UK-based customer would earn $41.67 in commission, whereas for the German-based customer they would earn $42.02 commission.
Enabling tax-inclusive pricing
To enable tax-inclusive pricing on your product, you will need to have Stripe Connect+ enabled as a payment processor on your product as a minimum.
Then, you’ll need to save your product settings, and you can then go back to the Pricing tab of your product settings and choose ‘add to price’ or ‘include in price’ for your tax calculation. You’ll want to set this to ‘include in price’ and then save your product.
