COGS Tax On Profit Margin

COGS Tax is a plugin for WooCommerce which calculates tax based on the margin (product price – cost of goods) instead of the full product price on a global or per product basis.

Features

• Calculate tax based on margin (price – COGS) instead of full product price
• Works with both cart and order calculations
• Global setting to enable/disable margin-based tax for all products
• Per-product setting to override global setting for individual products
• Support for simple products and variations
• Quick edit and bulk edit support
• HPOS (High-Performance Order Storage) compatible – Works with WooCommerce’s new order storage system
• Cart & Checkout Blocks compatible – Works with WooCommerce block-based checkout
• Compatible with WooCommerce COGS (Cost of Goods Sold) feature
• Automatically handles products without COGS values (falls back to standard tax calculation)
• Works with standard and custom tax rates set globally and per product

Global Setting

1. Navigate to WooCommerce > Settings > COGS Tax
2. Check the “Enable Margin-Based Tax” option
3. Click Save changes

This will enable margin-based tax calculation for all products by default.

Per-Product Setting

1. Edit a product in Products > All Products
2. In the General tab, find the “Margin-Based Tax” dropdown
3. Choose one of the following:

• Use global setting – Follows the global setting (default)
• Enable – Always use margin-based tax for this product
• Disable – Never use margin-based tax for this product

4. Click Update to save

Note: Per-product settings override the global setting. This allows you to have some products with margin-based tax and others with standard tax calculation.

How It Works

When enabled, the plugin:

1. For each product in the cart or order, calculates the margin: Product Price - COGS Value
2. Uses this margin amount as the taxable base instead of the full product price
3. Calculates taxes on the margin amount
4. Restores original prices after tax calculation

Example:

• Product Price: $100
• COGS: $50
• Margin: $50
• Tax Rate: 5%
• Tax Amount: $2.50 (instead of $5 on regular product price)