Tax-inclusive pricing: tax amount is wrong due to double rounding

mendozal · February 2, 2026, 1:39pm

I opened this issue on GitHub regarding this issue:

github.com/frappe/erpnext

Tax-inclusive pricing: tax amount is wrong due to double rounding

opened 05:38PM - 30 Jan 26 UTC

closed 07:12AM - 02 Feb 26 UTC

mendozal

bug accounts

### Information about bug When using "Is this Tax included in Basic Rate?", the… tax row amount can be wrong due to compound rounding. The grand total appears correct because adjust_grand_total_for_inclusive_tax() in the core silently corrects it, but the tax row and its GL entries remain incorrect. This affects any tax rate and any item amount where the intermediate rounding of net_amount causes a loss of precision. It's easier to trigger with low-precision settings but can happen at any precision level where rounding crosses a boundary. The effective precision comes from the currency's decimal places or the global "Currency Precision" in System Settings (whichever applies). Both paths lead to the same situation. Steps to reproduce: - Set currency precision to 0 (either via currency settings or System Settings > Currency Precision) - Create a Sales Taxes and Charges Template: 10%, "Is this Tax included in Basic Rate?" checked - Create a Sales Invoice, one item, rate = 50,000 - Submit Calculation: - net_amount = round(50,000 / 1.10) = round(45,454.545...) = 45,455 (commercial rounding) - Expected tax: 50,000 − 45,455 = 4,545 - Actual tax (what ERPNext computes): round(0.10 × 45,455) = round(4,545.5) = 4,546 - Grand total shows 50,000 (correct, silently fixed by adjust_grand_total_for_inclusive_tax()), but the tax row shows 4,546 instead of 4,545. The tax account GL entry is therefore wrong by 1. - Row shows total of 50,001 Root cause: `erpnext/controllers/taxes_and_totals.py around line 581:` `current_tax_amount = (tax_rate / 100.0) * item.net_amount` `net_amount` is already rounded. Multiplying it back by the rate introduces a second rounding pass. The correct calculation: current_tax_amount = item.amount - item.net_amount This gives the exact tax without double rounding. Happens regardless of rounding method (Banker's, Commercial). ### Module accounts ### Version Frappe version: 16.4.1 ERPNext version: 16.3.0 ### Installation method docker ### Relevant log output / Stack trace / Full Error Message. ```shell ```

But it was closed because apparently is working as expected (last image in the issue).

But I’m still seeing this issue on my end. Basically the tax is increased by 1 due to double rounding somewhere.

Please take a look at this image. the total in the sales tax template is 50,001 instead of 50,000.

I tried different approaches, moving from banker’s rounding to commercial rounding. Using 0 precision in the currency precision field. Nothing changes this result.

I can’t reopen the issue, and before opening another one. Is anyone having this issue or is able to replicate it?

This is a clean install with US region and USD currency. The tax template “US ST 6%” was modified to have 10% tax rate and “Is this Tax included in Basic Rate?” is checked for tax inclusive pricing.

The issue even happens to me with 2 decimal places

ahsantareen · February 3, 2026, 9:45am

@mendozal

You can disable rounding off globally by visiting Global Defaults. On the other hand, invoice doctype itself offer Disable Rounded Totals checkbox within grand total section.

You also need to set precision for all currency fields in system setting as well.

mendozal · February 3, 2026, 1:07pm

Sadly toggling those options don’t affect the tax totals. The issue still persists.

asieftejani · February 4, 2026, 12:01pm

@mendozal

I tried it on my site and I got the same result as your 2 decimal picture which is I think to me perfectly fine
45,454.55 X 1.1 = 50,000.01 (after rounding up)
Is your issue that a client will have a problem with $0.01 in tax?
If so then I think you can set the default rounding off account to the tax account so that it becomes super accurate.
Have I understood your problem properly?

mendozal · February 4, 2026, 12:48pm

Yes, that’s exactly my problem. Though my issue is that my currency doesn’t use cents but rounded numbers. And the difference is a whole unit.

I can live with that too, but ERPNext doesn’t allow me to submit that invoice.

The rounding solution you propose would work I suppose. But there are a couple of tax accounts and apparently te round off account only has space for 1.