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Setting labor taxes and labor rates

When you sign in to your Lightspeed Retail account for the first time, you're greeted with the Welcome page. By completing it, you'll have set up your location's sales tax. As setting a labor tax and a labor rate isn't covered in the Welcome page, however, doing so involves these additional steps:


  1. Enabling the Service module
  2. Enabling labor tax
  3. Applying a custom labor tax rate (optional)
  4. Setting a labour rate (optional)


  • Enabling the Service module

    To charge customers for services in a sale or a work order, you first need to add the Labor menu button to your register.


    To do so, you need to enable the Service module that contains the work order and labor features:


    1. From the main menu, click Settings Optional Modules.
    2. Enable Service.
    3. Click Save Changes.
    4. Sign out and sign back in to see the Labor menu button in your register and Service in the main menu. 


  • Enabling labor tax

    Now that you've enabled the Labor menu button, you can avoid additional clicks and errors at the register by taxing your labor charges automatically. To do so, simply enable labor tax for the location that provides services to its customers:


    1. From the main menu, click Settings > Locations.
    2. Click Customize next to the location you want to enable labor tax for.
    3. From the submenu, click Settings
    4. Under Tax Setup, select the Tax Labor/Service checkbox.
    5. Click Save Changes.

    By enabling the Tax Labor/Service setting, a Labor tax class will automatically be created under Settings Tax Classes the next time you click the Labor menu button in a sale or work order. Your shop will also know to tax your labor charges at the same tax rate as your items. If your labor charges are taxed at a different tax rate than your items, please continue to the Step 3 section of this article.


  • Applying a custom labor tax rate (optional)

    If your labor charges are taxed at a different rate than your items, you'll need to create a labor tax class that has a custom tax rate. To do so:


    1. From the main menu, click Setting > Tax Classes. If a tax class called "Labor" already exists, skip to step 4.
    2. Click + New Tax Class.
    3. In the Class Name field, enter Labor. This will ensure that your Retail account will recognize it as the tax class for your labor charges.
    4. From the main menu, click Setting Sales Taxes.
    5. Click the sales tax of the shop that requires the custom labor tax rate.
    6. From the Class drop-down, select Labor.
    7. In the Class Tax Rate field, enter the custom tax rate of your labor tax.
    8. Click + Add New Rate.


  • Setting a labor rate (optional)

    If you're enabling labor tax, it's likely because you have employees that provide a service to your customers at a certain labor rate per hour. In your location settings, you can set this labor rate to automatically charge your customers based on the amount of hours and minutes you enter in your work orders. To do so:


    1. From the main menu, click Settings > Locations.
    2. Click Customize next to the location you want to set a labor rate for.
    3. From the submenu, click Settings
    4. In the Service / Labor area, enter the labor rate per hour that you charge at your location in the Service Rate ($/hour) field.
    5. Click Save Changes


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