Often we receives questions concerning the calculation of taxes in Theatre Manager and that Theatre Manager's calculation doesn't always match to those calculations outside of the program. The following is an example of how Theatre Manager builds and calculates taxes, specifically related to the compound harmonized tax rate of 5% and 7%.

Theatre Manger is built to calculate tax on each entity of an order: the ticket price, ticket fee #1, ticket fee #2, ticket fee #3, membership/passes, order and exchange fees. And as a result truly a more accurate account of taxation.

Lets consider a very common ticket sale transaction which consists of 5 tickets: 2 Adult, 2 Senior and 1 Student. The tickets are priced as follow: 2 @ $15.00, 2 @ $13.00 and 1 a $12.00 to then which taxes are them applied. If one were to add that up on "paper" one would add: $15.00 + $15.00 + $13.00 + $13.00 + $12.00 to equal $68.00. Then take $68.00 x 5% = $3.40 + $68.00 x 7%= $4.76 for a grand total of $76.16. but that is not accurate.

Theatre Manager does however calculate tax as:

- 15.00 x 5% = 0.75, then 15.00 x 7% = 1.05
- 13.00 x 5% = 0.65, then 13.00 x 7% = 0.91
- 12.00 x 5% = 0.60, then 12.00 x 7% = 0.84

- 15.00 + 0.75 + 1.05 = $16.80
- 13.00 + 0.65 + 0.91 = $14.56
- 12.00 + 0.60 + 0.84 = $13.44

- 2 tickets @ $16.80 = $33.60
- 2 tickets @ $14.56 = $29.12
- 1 ticket @ $13.44 = $13.44 for a Grand Total of $76.38 * not $76.16 as calculated on the total.

It is indeed more tax but more accurate as Theatre Manager treats each ticket individually. It is necessary calculate in the manner if you have occasion to refund one of those tickets or exchange and upgrade one of those tickets in this example.