In short: Tax-inclusive prices are clearer for individual shoppers and allow tidy numbers. Tax-exclusive prices are clearer for businesses. Whichever you choose: one approach, consistent rounding to the fils, tax that follows the discounted price, and a receipt that shows before-tax, tax and total.
In this guide
A customer sees 2.500 JOD on the shelf and pays 2.900 at the till. Nobody got the maths wrong. The shop chose tax-exclusive prices and never said so clearly. This guide covers the difference between the two approaches, how to choose, and how to work out tax to the fils without losing money to rounding. The basic divide-by-1.16 formula is in our tax invoice guide. Here we go past it. This is general information, not tax advice, and the examples use the general 16% rate for illustration only.
The two approaches side by side
It all comes down to one question: is the number on the item what the customer will pay, or the price before tax?
| Comparison | Tax-inclusive price | Tax-exclusive price |
|---|---|---|
| What the customer sees on the shelf | The amount they will pay | An amount that has tax added at the till |
| Example, item at 16% | 2.900 JOD, of which 0.400 is tax | 2.500 JOD plus 0.400 tax, 2.900 JOD in total |
| How the tax is found | Price ÷ 1.16, then the difference | Price × 0.16 |
| Usually suits | Selling to individuals: grocery, clothing, café | Selling to companies and traders who compare prices before tax |
Pick one approach for your shop, or at least one per type of customer, and never mix them on the same shelf.
Why retail shops tend to prefer tax-inclusive prices
A grocery customer counts what is in their pocket against the price they see. If they see 2.500 and pay 2.900, it feels like someone added something on, even when everything is correct. Tax-inclusive pricing takes that moment away from the counter.
It also lets you choose prices that are easy to give change for. An item you decide to sell at 0.990 before tax becomes 1.148 with tax, a number that slows down cashier and customer alike. Set the tax-inclusive price at 1.150 instead and the tax inside it takes care of itself: 0.991 before tax and 0.159 tax.
If most of your customers are companies that deduct tax in their own books, the price before tax is clearer for them, because they compare offers without tax.
Fils matter: where you round
A dinar is 1,000 fils and amounts are written to three decimal places. Dividing by 1.16 usually leaves fractions smaller than a fils, so something has to be rounded. The question is whether you round the unit price and multiply by the quantity, or work out the whole line and round once. Example: 10 tins at 0.350 JOD each, tax included.
| Method | Before tax | Tax | Total |
|---|---|---|---|
| Round the unit price, then multiply by 10 | 3.020 JOD | 0.480 JOD | 3.500 JOD |
| Work out the whole line, then round | 3.017 JOD | 0.483 JOD | 3.500 JOD |
The gap is 3 fils on one line, but it repeats across thousands of lines a month. What matters is using one consistent method on every invoice, and asking your accountant which one matches what your shop sends to JoFotara.
Discounts on tax-inclusive prices
Tax follows the price the customer actually paid, not the price before the discount. An item at 23.200 JOD including tax is 20.000 before tax and 3.200 tax. Give 10% off and the tax-inclusive price becomes 20.880 JOD: 18.000 before tax and 2.880 tax.
The mistake is taking 10% off the price and leaving the tax at 3.200, which loads the invoice with more tax than it should carry. The same applies to a fixed amount off a whole invoice: if the invoice mixes tax rates, the discount needs to be spread across the lines so each line's tax stays correct. Check with your accountant how discounts should appear on your invoices.
When your status changes: from unregistered to registered
The hardest pricing moment is when a shop registers for sales tax after reaching the threshold. Take an item you sold for 5.000 JOD before registering. Keep 5.000 as a tax-inclusive price and what is left before tax is 4.310, with 0.690 tax, so the tax comes out of your margin. Add the tax on top and the price becomes 5.800, which customers will notice.
There is no single right answer. But it is a decision to make with numbers, category by category, not by flipping a setting in the app and forgetting about it. Review each category's margin after the change. The profit margin calculator on our tools page can help.
What the receipt should show
- Each item's price, in the approach you chose, to three decimal places.
- On a sales tax invoice: the amount before tax, the tax amount and the total, each clear and separate, even if your prices include tax.
- Any discount as a visible line, not buried in the price.
- The JoFotara QR code, if your shop uses e-invoicing.
- If your prices exclude tax, a clear note on the shelf or by the till saying so, so nobody is surprised at payment.
How to set it up in Ghalleh
In Ghalleh you choose whether your shop's prices include tax or have it added, and set each product's tax once. From then on Ghalleh works out the price before tax, the tax and the total on every line the same way on every invoice, and prints an Arabic receipt to three decimal places, with the QR once the invoice has gone to JoFotara.
Sales reports show the tax for each period and go to your accountant as a PDF. To try a figure before you change your prices, the sales tax calculator on our tools page adds tax to a price or pulls it out of a tax-inclusive one. Ghalleh is available now on Google Play, and the Windows version is on the download page, with a 14-day free trial with every feature and no card.
Common questions
How do I work out a price including tax?
At the general 16% rate, multiply the price before tax by 1.16. For example 2.500 JOD × 1.16 = 2.900 JOD, of which 0.400 is tax. To go the other way, divide the tax-inclusive price by 1.16 to get the price before tax. The difference is the tax.
Which suits a retail shop better, tax-inclusive or tax-exclusive prices?
For selling to individuals, tax-inclusive prices are usually clearer, because customers pay what they see. For selling to businesses, prices before tax are clearer. Whichever you choose, show it clearly and do not mix the two.
Why is my tax total a fils or two off from the calculator?
Rounding. Dividing by 1.16 produces fractions smaller than a fils, and the result shifts slightly depending on whether you round the unit price or the whole line. Use one consistent method and agree it with your accountant.