If you run an online store, then you’re legal­ly required to col­lect sales tax in most coun­tries. But tax­es vary by coun­try, state, and region, so fig­ur­ing out the right tax rates for your prod­ucts and ser­vices can get pret­ty complicated. 🤯

We sell to cus­tomers all over the world, so we’ve faced the same challenges. 

Luck­i­ly, there are Word­Press plu­g­ins that make it super easy to auto­mat­i­cal­ly col­lect tax­es, no mat­ter what type of prod­uct you sell. 

For exam­ple, we use Easy Dig­i­tal Down­loads to sell our soft­ware and plu­g­ins, and we love it because it makes col­lect­ing tax­es a breeze. But if you sell phys­i­cal prod­ucts or ser­vices, then you may need a dif­fer­ent tool like WooCommerce. 

In this arti­cle, we’ll show you how to col­lect tax­es for Stripe pay­ments in Word­Press, step by step, for all the most com­mon scenarios.

Why Collect Taxes for Stripe Payments in WordPress?

When you are run­ning an online busi­ness, col­lect­ing tax­es is not just a best prac­tice. It is also a legal obligation. 

Whether you are sell­ing phys­i­cal prod­ucts, dig­i­tal down­loads, or sub­scrip­tion ser­vices, you need to col­lect the appro­pri­ate tax­es at check­out to com­ply with local, state, and inter­na­tion­al laws.

Fail­ure to do so could lead to hefty penal­ties and also harm your business’s reputation.

So, col­lect­ing tax­es for all your Stripe pay­ments in Word­Press is not negotiable.

Keep in mind, though, that tax­es are also an impor­tant part of the user expe­ri­ence.

When you cal­cu­late and dis­play tax­es clear­ly dur­ing check­out, cus­tomers are less like­ly to feel sur­prised or frus­trat­ed by final pay­ment totals. Plus, it shows them that your busi­ness is legit­i­mate and also sim­pli­fies your book­keep­ing process.

Hav­ing said that, let’s take a look at how to eas­i­ly col­lect tax­es for Stripe pay­ments in WordPress.

We will cov­er a few dif­fer­ent meth­ods, and you can use the quick links below to jump to the one you want to use:

Collect Taxes for Subscriptions, Services, and Single Products (WP Simple Pay)

If you sell sub­scrip­tions, ser­vices, or sin­gle prod­ucts on your web­site, then the eas­i­est way to make mon­ey and col­lect tax­es is by cre­at­ing a sim­ple pay­ment form.

To do this, we rec­om­mend WP Sim­ple Pay. We love it because it comes with a lot of dif­fer­ent pre­made pay­ment tem­plates, an intu­itive form builder, and com­plete spam protection.

While test­ing the plu­g­in, we found its fixed and auto­mat­ic tax rate fea­tures super help­ful for col­lect­ing tax­es. The fixed tax rate option lets you set a tax rate man­u­al­ly, which works great if you are focused on one region with steady tax rules.

On the oth­er hand, the auto­mat­ic tax rate fea­ture cal­cu­lates and applies the cor­rect rate based on the customer’s loca­tion, sav­ing time and reduc­ing the risk of errors. 

For more details on our expe­ri­ence with the plu­g­in, see our detailed WP Sim­ple Pay review.

To get start­ed, first, you need to install and acti­vate the WP Sim­ple Pay plu­g­in. To learn more, see our tuto­r­i­al on how to install a Word­Press plu­g­in.

After you acti­vate the plu­g­in, a set­up wiz­ard will appear on your screen. Here, sim­ply click the ‘Let’s Get Start­ed’ button.

Next, you have to add your plugin’s license key.

You can get this infor­ma­tion in your account on the WP Sim­ple Pay web­site. After you enter your license key, click the ‘Acti­vate and Con­tin­ue’ button.

Then, con­nect your Stripe account with WP Sim­ple Pay. Keep in mind that the plu­g­in will not work unless you con­nect it with a new or exist­ing Stripe account. 

To get start­ed, click the ‘Con­nect with Stripe’ but­ton and log in to your account. For more details, see our tuto­r­i­al on how to accept Stripe pay­ments in Word­Press.

Once you have suc­cess­ful­ly con­nect­ed your web­site with Stripe, the set­up wiz­ard will ask you to con­fig­ure your emails.

At this point, you can enable options to receive email noti­fi­ca­tions for pay­ment receipts, upcom­ing invoic­es, and pay­ment noti­fi­ca­tions. You will also need to enter the email address where you want to receive these messages.

Final­ly, just click the ‘Save and Con­tin­ue’ but­ton. You can then com­plete the oth­er steps and exit the set­up wizard.

Once that’s done, go to the WP Sim­ple Pay » Pay­ment Forms page from the Word­Press dashboard.

Next, click the ‘Cre­ate Your Pay­ment Form’ button.

This will take you to the ‘Select a tem­plate’ screen. Here, you will see a list of pre­made templates.

You can choose a suit­able tem­plate by click­ing the ‘Use Tem­plate’ but­ton under it. For this tuto­r­i­al, we will use the sim­ple ‘Pay­ment Form’ template.

After you choose a tem­plate, WP Sim­ple Pay’s form builder will launch on your screen. Here, you can start by adding a title and descrip­tion for your form.

Then, select your form type as ‘On-site pay­ment form.’

Now, head over to the ‘Form Fields’ tab. Here, you will find a drop­down menu where you can add a new form field.

Once you do that, click on the new­ly added option to expand the set­tings and cus­tomize it as need­ed. You can also drag and drop the fields to rearrange them how­ev­er you like.

These fields will show up on your pay­ment form, so make sure to add all the nec­es­sary form fields to col­lect the details you need from your customers.

For exam­ple, if you want to show tax rates based on the customer’s loca­tion, you will need to add an address field. This way, cus­tomers will have to pro­vide their home address when mak­ing a purchase.

Once that is done, switch to the ‘Pay­ment’ tab and add a price for your prod­uct. You can also add mul­ti­ple prod­ucts by click­ing the ‘Add Price’ button.

On the oth­er hand, if you plan to sell sub­scrip­tion ser­vices, then select the ‘Sub­scrip­tion’ option and start adding dif­fer­ent tiers.

When you are ready, scroll down to the ‘Pay­ment Meth­ods’ sec­tion to choose options like ACH direct deb­it, card, Klar­na, Affirm, Cash App, and Ban­con­tact to accept Stripe payments.

Once you have done that, head up to the ‘Tax Col­lec­tion’ sec­tion. Here, you can select one of the two tax col­lec­tion meth­ods accord­ing to your preference.

We will explain how to add a fixed tax rate and an auto­mat­ic tax rate to your pay­ment form. 

Method 1: Add Fixed Tax Rate for Your Stripe Pay­ments (Sell­ing in One Region)

In this sec­tion, we will explain how to col­lect tax­es if you are sell­ing in a sin­gle region. This is a great choice if you sell and ship prod­ucts only in a small region with uni­form tax­es, such as a state or province.

To do this, you will need to define the tax rate for your prod­ucts manually. 

First, you need to open the ‘Pay­ment’ tab in the set­tings for WP Sim­ple Pay. Then, choose the ‘Fixed tax rates’ option from the Tax Col­lec­tion drop­down menu.

After you’ve made your selec­tion, just click the ‘Save Draft’ but­ton for your form.

Next, vis­it the WP Sim­ple Pay » Set­tings » Gen­er­al page from the Word­Press dash­board and switch to the ‘Tax­es’ tab.

Here, you need to check the ‘Enable’ box next to the ‘Glob­al Tax Rates’ option. This will open some new set­tings on the page, where you have to click the ‘Add Rate’ button.

You can now add a name and tax rate for your prod­ucts or ser­vices in the popup.

After that, you must spec­i­fy if you want your tax to be cal­cu­lat­ed inclu­sive­ly or exclusively. 

If you choose inclu­sive tax, then the required tax will auto­mat­i­cal­ly be includ­ed in the total price of the item. 

Mean­while, with exclu­sive tax, cus­tomers will be able to see the break­down of the total cost of the pur­chase. This will include a subto­tal with the base price and a sep­a­rate line show­ing the sales tax.

We rec­om­mend choos­ing exclu­sive tax so your cus­tomers don’t think you are over­charg­ing them.

Once you’ve made your choice, sim­ply click the ‘Add Tax Rate’ but­ton. The pop­up will close auto­mat­i­cal­ly. Then, click the ‘Save Changes’ but­ton to store your settings.

Now, open up your form again and vis­it the ‘Pay­ment Page’ sec­tion in the left column.

Here, you can check the ‘Enable a ded­i­cat­ed pay­ment page’ box to cre­ate a cus­tom pay­ment form page. To cus­tomize the form, you can add a perma­link, col­or scheme, image, and foot­er text.

Final­ly, click the ‘Pub­lish’ but­ton to save your settings.

You can now vis­it your web­site to see the pay­ment form with a fixed tax rate.

How­ev­er, if you want to add this form to an exist­ing page, then just click the ‘Pub­lish’ but­ton after adding the tax rate.

Then, open an exist­ing page from your Word­Press dash­board and click the ‘Add Block’ button.

Once the block menu opens up, locate and add the WP Sim­ple Pay block and choose the form you just cre­at­ed from the drop­down menu.

Next, click the ‘Update’ or ‘Pub­lish’ but­ton to store your changes.

You have now added a pay­ment form with a fixed tax rate to an exist­ing Word­Press page.

☝ Relat­ed Post: If you’re set­ting up tax­es in Word­Press, then under­stand­ing online pay­ment trends can help you opti­mize your check­out process. Check out our post on impor­tant pay­ment sta­tis­tics, data, and trends to stay informed.

Method 2: Add Auto­mat­ic Tax Rate for Your Stripe Pay­ments (Sell­ing in Mul­ti­ple Locations)

If you want to auto­mat­i­cal­ly con­fig­ure the tax rate for your cus­tomers based on their loca­tion, then this method is for you. This is ide­al if you’re sell­ing in mul­ti­ple coun­tries and regions.

To do this, you must choose the ‘Auto­mat­i­cal­ly cal­cu­lat­ed by loca­tion’ option from the ‘Tax Col­lec­tion’ drop­down menu in the WP Sim­ple Pay form builder.

Once you do that, you will have to vis­it your Stripe account dash­board to acti­vate auto­mat­ic tax col­lec­tion. From here, you can mon­i­tor the dif­fer­ent regions where your busi­ness is cross­ing the tax threshold. 

You can then add reg­is­tra­tion and start col­lect­ing tax­es for these loca­tions easily.

How­ev­er, remem­ber to con­firm your ori­gin address and select a default tax cat­e­go­ry to ensure accu­rate tax cal­cu­la­tions for your business.

Now, when you head back to your Word­Press dash­board, you will notice that choos­ing this option has opened some new set­tings under the ‘Tax Col­lec­tion’ section.

Here, you have to choose a tax cat­e­go­ry for the prod­uct or ser­vice that you are sell­ing from the ‘Tax Cat­e­go­ry’ drop­down menu.

For instance, if you sell skin care prod­ucts, then you can choose that option.

Next, decide whether you want to dis­play tax inclu­sive­ly or exclu­sive­ly. If you choose the inclu­sive option, then the tax will be includ­ed in the over­all prod­uct price.

On the oth­er hand, if you select the exclu­sive option, the tax amount will be shown sep­a­rate­ly. The subto­tal will dis­play the base price of the trans­ac­tion, and there will be a sep­a­rate line for sales tax.

We rec­om­mend using the exclu­sive option, as it is more trans­par­ent for your customers.

Once that is done, you can head over to the ‘Pay­ment Page’ section. 

Check the ‘Enable a ded­i­cat­ed pay­ment page’ box if you want the plu­g­in to gen­er­ate a cus­tom pay­ment page. Then, cus­tomize your page how­ev­er you like.

When you’re ready, click the ‘Pub­lish’ but­ton to save your changes.

Now, vis­it your web­site to see the pay­ment form with auto­mat­ic tax cal­cu­la­tion in action.

On the oth­er hand, if you don’t want the plu­g­in to gen­er­ate an entire­ly new pay­ment page, just click the ‘Pub­lish’ but­ton after con­fig­ur­ing the tax settings. 

Then, to add your pay­ment form to a pre-exist­ing page, just open it with the block edi­tor and choose the WP Sim­ple Pay block from the menu.

Next, choose the form you cre­at­ed from the drop­down menu with­in the block.

After that, click the ‘Update’ or ‘Pub­lish’ but­ton to save your changes.

Now, vis­it your site to view the Stripe pay­ment form with an auto­mat­ic tax cal­cu­la­tion field.

Collect Taxes for Physical Products (WooCommerce)

If you run an online store with mul­ti­ple phys­i­cal prod­ucts, then pay­ment forms won’t offer the most straight­for­ward approach. You’ll prob­a­bly need more eCom­merce fea­tures and tools.

In that case, we rec­om­mend using WooCom­merce. This free eCom­merce plu­g­in makes it super easy to sell your phys­i­cal prod­ucts, accept pay­ments through Stripe, and col­lect tax­es for those payments. 

We’ve worked with this tool a lot, so we know it like the back of our hand. For more insights on what it can do, check out our detailed WooCom­merce review.

The best part? Using WooCommerce’s built-in fea­tures, you can auto­mat­i­cal­ly cal­cu­late sales tax based on your store’s loca­tion and where your cus­tomers are.

Plus, it sup­ports dif­fer­ent tax rates, includ­ing state, coun­try, and even city-spe­cif­ic taxes.

To begin, you’ll need to install and acti­vate the WooCom­merce plu­g­in. To learn more, see our tuto­r­i­al on how to install a Word­Press plu­g­in.

After acti­vat­ing the tool, you can set up your WooCom­merce store to start sell­ing prod­ucts. You will also need to con­nect Stripe with WooCom­merce to col­lect payments. 

Just see our com­pre­hen­sive WooCom­merce guide if you need help with the process.

Once your store is set up, you need to vis­it the WooCom­merce » Set­tings » Gen­er­al page from the Word­Press dash­board and scroll down to the ‘Enable Tax­es’ section.

Sim­ply check the box next to it and click the ‘Save Changes’ button.

Once you do that, a ‘Tax’ tab will appear in the top menu. When you vis­it that page, you will start by decid­ing how you want to dis­play taxes. 

You can choose to dis­play tax­es exclu­sive­ly, mean­ing they will be shown sep­a­rate­ly at check­out instead of being includ­ed in the prod­uct price. This ensures cus­tomers see exact­ly how much tax they are pay­ing before com­plet­ing their purchase.

You can also choose to dis­play prices inclusively. 

This means the price you enter in the ‘Prod­uct data’ sec­tion of your WooCom­merce prod­uct will already include tax.

Next, you will need to set how tax­es are cal­cu­lat­ed. To do this, open the ‘Cal­cu­late tax based on’ drop­down menu and select an option.

You can choose to cal­cu­late tax­es based on the customer’s ship­ping address, which is great if you are ship­ping to dif­fer­ent regions with vary­ing tax rates. 

On the oth­er hand, select the billing address if you pre­fer to use the address your cus­tomer enters for payment.

There is also the option to use your shop’s base loca­tion, which keeps things sim­ple by apply­ing your local tax rate to all orders.

After that, it is time to change the ship­ping tax class. In this sec­tion, you can choose how WooCom­merce should cal­cu­late tax on the cost of shipping.

For instance, if you choose ‘Ship­ping tax class based on cart items’, then the ship­ping tax cost will be cal­cu­lat­ed based on the tax class assigned to the prod­uct being shipped. 

If you choose the ‘Stan­dard’ tax class, then the default tax rate you have set up for the prod­uct will also be applied to the ship­ping tax.

The reduced tax class is for items that have a low­er tax rate, like cer­tain food prod­ucts or books, depend­ing on your region. 

Final­ly, the zero tax class applies no tax to ship­ping at all, which might be use­ful if you’re offer­ing tax-free ship­ping promotions.

Next, we rec­om­mend check­ing the box next to ‘Round tax at subto­tal lev­el, instead of round­ing per line.’

This means tax­es will be round­ed based on the entire order subto­tal rather than each indi­vid­ual prod­uct line.

You can now adjust the rest of the set­tings to fit your store’s needs.

One key option is decid­ing how to dis­play prices in your shop, cart, and check­out pages. 

You can choose to show prices includ­ing tax, so cus­tomers see the final amount upfront, or exclud­ing tax, which adds trans­paren­cy by show­ing tax­es separately.

Addi­tion­al­ly, you can con­fig­ure the ‘Price dis­play suf­fix’ set­ting to add text after your prod­uct prices. This can help show cus­tomers whether tax is includ­ed or exclud­ed in the price they see.

For exam­ple, if you enter “Price incl. VAT: {price_including_tax}”, your store will dis­play some­thing like Price incl. VAT: $50.40.

Next, change the ‘Dis­play tax totals’ set­ting to con­trol how tax­es appear dur­ing check­out. You can choose to show all tax­es as a sin­gle total or dis­play each tax as an item­ized list.

If you choose the ‘As a Sin­gle Total’ option, WooCom­merce will com­bine all applic­a­ble tax­es into one total amount. Cus­tomers will see just a sin­gle tax line instead of sep­a­rate breakdowns. 

For exam­ple, if a prod­uct has mul­ti­ple tax rates (like state tax and local tax), they will all be merged and sim­ply shown as ‘Tax­es’ at check­out. This keeps things clean and simple.

On the oth­er hand, if you set it to ‘Item­ized,’ then cus­tomers will see each tax rate sep­a­rate­ly. This means WooCom­merce will list out every applic­a­ble tax, such as state and local tax­es, on their own lines.

This pro­vides more trans­paren­cy, so cus­tomers know exact­ly what they’re pay­ing for. The tax names shown will be the ones you enter in your WooCom­merce settings. 

We’ll walk you through how to do that in the next step. Once you are done, just click the ‘Save Changes’ but­ton to store your settings.

Then, switch to the ‘Stan­dard Rates’ page from the top and click the ‘Insert Row’ button.

You can now add the coun­try code, state code, post­code, city name, and tax rate for each loca­tion where you want to col­lect taxes.

If you only want to col­lect tax­es accord­ing to your store’s loca­tion, then you will only need to add one row. You can also add a tax name for each row so you can eas­i­ly dif­fer­en­ti­ate them.

If you select the item­ized option in the ‘Dis­play tax totals’ sec­tion, then the name you choose for each tax row will be the one dis­played on the check­out page. 

For exam­ple, if you set up sep­a­rate tax rates for goods and ser­vices (GST) and provinces (PST), those exact labels will appear in the order summary.

Final­ly, click the ‘Save Changes’ button.

Now, vis­it your WooCom­merce store to see the tax rate dis­played on your check­out page.

Depend­ing on your set­tings, the rate may also be dis­played on your prod­uct and cart page.

Collect Taxes for Digital Products (Easy Digital Downloads)

If you want to col­lect tax­es when sell­ing your dig­i­tal prod­ucts through Stripe, then Easy Dig­i­tal Down­loads (EDD) is the best option.

This plu­g­in is built specif­i­cal­ly for sell­ing dig­i­tal prod­ucts and offers seam­less tax col­lec­tion, includ­ing for Stripe trans­ac­tions. The plu­g­in han­dles every­thing from set­ting rates to gen­er­at­ing reports, mak­ing tax man­age­ment eas­i­er for stores.

We use EDD to sell our plu­g­ins and soft­ware. So, we’ve seen first­hand how easy it is to col­lect Stripe pay­ments and man­age tax­es. To learn more, see our com­plete Easy Dig­i­tal Down­loads review.

First, you need to install and acti­vate the Easy Dig­i­tal Down­loads plu­g­in. For more instruc­tions, see our guide on how to install a Word­Press plu­g­in.

Once you acti­vate the plu­g­in, you will need to set up your store, add prod­ucts, and con­nect Stripe with the plugin. 

To get start­ed, fol­low our beginner’s guide on how to sell dig­i­tal down­loads in Word­Press.

When that is done, head over to the Down­loads » Set­tings » Tax­es page in the Word­Press admin sidebar.

Here, enable the ‘Tax­es’ option by check­ing the box next to it.

Then, choose if you want to dis­play tax­es exclu­sive­ly or inclusively.

If you choose ‘Yes, I will enter prices inclu­sive of tax’, then the price you entered in a product’s data is the total amount the cus­tomer will pay after taxes.

So, if you set the price of a prod­uct as $20, the cus­tomer will pay $20 at check­out. The exact amount that will go towards tax­es will be cal­cu­lat­ed automatically.

If you select ‘No,’ the price you entered on the prod­uct edit screen will not include the tax amount.

After that, we rec­om­mend check­ing the ‘Show Tax Rate on Prices’ option. This way, the cus­tomer will see the amount they are expect­ed to pay in tax below the pur­chase button.

Next, decide how you want to dis­play prod­uct prices on the check­out page. You can choose to show prices includ­ing tax, which means the total price cus­tomers see will have tax added.

Or, you can show prices exclud­ing tax, where the price shown is just the prod­uct amount before tax (also called the subto­tal). The tax will then be added sep­a­rate­ly at checkout.

Final­ly, click the ‘Save Changes’ but­ton to store your settings.

Now, switch to the ‘Rates’ sec­tion from the top. Here, you can add tax rates for spe­cif­ic coun­tries or states/provinces in those countries.

To do this, choose a country/ state from the drop­down menu and add its tax rate. Then, click the ‘Add Rate’ button.

You can repeat this step as many times as you like. 

Once you are done, just click the ‘Save Changes’ button.

Now, just vis­it your dig­i­tal prod­ucts store to check how tax­es are being col­lect­ed for Stripe payments.

Bonus: Create Visually-Appealing Invoices for Customers

Man­ag­ing tax col­lec­tion is a legal require­ment for eCom­merce sites. But if you sell busi­ness prod­ucts or ser­vices (or you just want to go above and beyond), then you can also offer your cus­tomers eye-catch­ing invoic­es for their records.

An invoice that shows the subto­tal, tax amount, and total cost helps with trans­paren­cy and makes it eas­i­er for cus­tomers to track expens­es, han­dle reim­burse­ments, and even deal with cus­toms claims.

To cre­ate pro­fes­sion­al-look­ing invoic­es, we rec­om­mend using Fresh­Books.

It is a pop­u­lar account­ing soft­ware for small busi­ness­es that offers an easy way to cre­ate cus­tomiz­able invoic­es with your logo and per­son­al­ized notes. 

Plus, it auto­mates reminders for over­due pay­ments, secure­ly process­es recur­ring cred­it card pay­ments, and noti­fies both you and your customers.

You can also include tax infor­ma­tion, pay­ment terms, dis­counts, and cur­ren­cy in your invoic­es, pro­vid­ing a clear break­down of payments.

Although it is a third-par­ty tool, Fresh­Books seam­less­ly inte­grates with top web­site builders, includ­ing WordPress.

For step-by-step instruc­tions, see our tuto­r­i­al on how to cre­ate invoic­es for clients using Word­Press.

Related Guides for Accepting Payments in WordPress

Need more infor­ma­tion on accept­ing pay­ments in your online store? Check out our relat­ed guides:

• Best Authorize.Net Word­Press Plu­g­ins (Com­pared)
• How to Eas­i­ly Accept Bit­coin Pay­ments in Word­Press (Step by Step)
• Best Book­keep­ing Ser­vices for Your Online Busi­ness (Com­pared)
• How to Accept Deposit Pay­ments in Word­Press (Easy Methods)
• Best Cred­it Card Pro­cess­ing Plu­g­ins for Word­Press (Com­pared)
• How to Add Stripe QR Code Pay­ment in WordPress
• How to Test Stripe Pay­ments on a Word­Press Site (Easy Methods)

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The post How to Col­lect Tax­es for Stripe Pay­ments in Word­Press (3 Easy Ways) first appeared on WPBe­gin­ner.