Calculating tax correctly using Mysql and php - php

Question

I am trying to re-calculate tax on a sale after it is entered into a database. I can calculate the information correctly before storing in the database, but calculating it from the database for reporting purposes has proved troublesome due to rounding errors.
The application displays an interface that allows one to add items and view the subtotal, taxes and totals.
Example input:
Item 1: 9.95
Item 2: 2.95
Subtotal: 12.90
Taxes (could be different for each item, but now they are all the same for each item)
2.900%: 0.37
1.000%: 0.13
1.100%: 0.14
3.000%: 0.39
Tax Total: 1.03
Total: 13.93
The way I calculate taxes before storing into database:
foreach Item as $price
{
foreach Tax as $percent
{
$taxes[$percent]+=$price*($percent/100);
}
}
foreach($taxes as $percent => $tax_amount)
{
$taxes[$percent] = ROUND_TO_2_DECIMALS($tax_amount);
}
After calculating all this information I store the information in a database that can be retrieved later for reporting purposes.
Example Schema:
phppos_sales_items
- sale_id
- item_id
- price
phppos_sales_items_taxes
- sale_id
- item_id
- tax_percent
Sample Data for phppos_sales_items table
sale_id: 1, item_id: 1, item_unit_price: 9.95
sale_id: 1, item_id: 2, item_unit_price: 2.95
Sample Data for phppos_sales_items_taxes table
sale_id: 1, item_id: 1, percent: 2.90
sale_id: 1, item_id: 1, percent: 1.00
sale_id: 1, item_id: 1, percent: 1.10
sale_id: 1, item_id: 1, percent: 3.00
sale_id: 1, item_id: 2, percent: 2.90
sale_id: 1, item_id: 2, percent: 1.00
sale_id: 1, item_id: 2, percent: 1.10
sale_id: 1, item_id: 2, percent: 3.00
Sample Query to calculate tax for a sale
(SELECT SUM(tax) FROM (SELECT ROUND((item_unit_price)*(SUM(percent)/100),2) as tax
FROM phppos_sales_items
INNER JOIN phppos_sales_items_taxes USING (sale_id, item_id)
WHERE sale_id = 1
GROUP BY sale_id, item_id) as tax)
Output is 1.04 when I need to get 1.03. This query works in most cases, but it fails a lot to when there are rounding problems.
I need to be able to generate summary informatation accuratly using sql. I am open to any suggestions on how to calculate information before the sale and in the database.

Answer 1

OK, so, your question, as I understand it has not much to do with programming.
So, you have an item which is worth $1. Now, you have two taxes on it, one is 1.4% and another one is 1.3%. Now, this is what you are doing
tax1 = round($1*0.014, 2) = $0.01
tax2 = round($1*0.013, 2) = $0.01
totaltax = $0.02
So far so good... OK, but now let's do it other way. If we add up the taxes, we should pay the total of 1.4 + 1.3 = 2.7%, which means:
totaltax = round($1*0.027, 2) = $0.03
See what happened here?
Now, which of these ways is right? If you physically need to pay tax1 separately from tax2, then each of them is quantified in cents and the first way is right. But, I feel like you most likely only pay the final total tax, that is you add up percents first, calculate your tax and then pay it to the nearest cent.
In relation to your code, you should get 1.03, that's right, but your query is doing a mistake similar to the first variant by rounding the result for each item before adding them up (it is doing round(price1*tax1, 2) + round(price2*tax2, 2)). (Actually, just to be complete, you have three places to round: individual tax level, item level and on the total level.)
To round at the end instead of for each item, move out your ROUND:
(SELECT ROUND(SUM(tax),2) FROM (SELECT (item_unit_price)*(SUM(percent)/100) as tax
FROM phppos_sales_items
INNER JOIN phppos_sales_items_taxes USING (sale_id, item_id)
WHERE sale_id = 1
GROUP BY sale_id, item_id) as tax)

Answer 2

Sorry to put as an answer, since the comment can not display code properly.
How about
(SELECT ROUND(SUM(tax)/100,2) FROM (SELECT item_unit_price*SUM(percent) as tax
FROM phppos_sales_items
INNER JOIN phppos_sales_items_taxes USING (sale_id, item_id)
WHERE sale_id = 1
GROUP BY sale_id, item_id) as tax)
Can you export the tables as sql, so I can try on my local? If nothing is too confidential.