Calculate General Service Tax (GST) on Management Fees

The Goods and Services Tax or General Service Tax (GST) is a tax that is paid on goods and services in Canada and some parts of the US. You can now automate calculations and easily add a service tax to management fees, saving you time and keeping you compliant. You also have the ability to report on GST collected to share with clients, accountants, or the government.

Note: If you have questions about tracking taxes, please consult your accountant.

1. Add a liability account to your chart of accounts

If you already have a liability account set up for GST, you can skip to step 2.

  • Navigate to Accounting > Chart of accounts.
  • Click Add account.
  • Complete the form:
    • Name: (ex: Goods and Services Tax)
    • Type: Long Term liability*

      *GST / HST, by accounting principle, is considered a short term liability because it must be remitted to the government within the year. Recording as a long term liability is a work around to the Buildium system for accurate cash balance reporting.

  • Click Save account.

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2. Set up your GST charge for Management Fees

  • Next, you'll set up your GST rate by navigating to Settings, then Application Settings.
  • Select Management Fee Settings.
  • Scroll down to the General Service Tax section, toward the bottom of the page.
  • Check the box to "charge a general service tax on management fees through Buildium."
  • Select the GL account you've established for your GST.
  • Under Charge, select whether the calculation will be based off of a percentage or flat amount.
  • Input the amount, and click Save

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3. Collect Management Fees

  • When it's time to collect management fees, navigate to either...
    • Rentals, then Properties.
    • or Associations, then Associations.
  • Click Management Fees, and then select Collect Management Fees.
  • Under Property, select the property owner, company, or association you wish to collect management fees from, set the appropriate date range, and click Search.
    • Note: You will only see a Tax column if your GST charge toggle is turned on.

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  • In the Tax column, you will now see the automatic tax calculations based on the percentage or flat amount you entered in the GST charge settings. If the amount needs to be overridden, you can manually add it into the Tax column.
    • Note: If you manually change the management fee on this page, the tax cannot be automatically recalculated. In this case, the tax amount will have to be manually recalculated.   
  • Select the properties you wish to collect management fees from using the checkboxes (or select all by clicking the top-left checkbox).
  • When you're ready, click Collect Fees at the bottom of the page.
    • Note: The total at the bottom is the total amount of the check (management fee + tax). 

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4. View Management Fee Check 

  • Once the Management Fee check has been recorded, you can view that check by navigating to Maintenance, then Vendors.
  • Find and select the vendor profile for the property management company.
  • On the Financials tab, click into the date the check was recorded and the management fee check will be displayed with a breakdown of management fees and taxes, grouped by Property.

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5. Generate a Report for Management Fee and GST

  • To view a report of your management fee and GST totals and line items, navigate to Reports, and find and select Transaction detail by account.
  • Select the Properties or Company you wish to report on.
  • Click the Accounts dropdown, and then find and select your Management Fees and/or Goods and Services Tax (GST) accounts.
  • Set your desired date range, your accounting basis, and then click Run Report or export to a format of your choosing.

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Article #: 111125

 

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