How to make Flat Rate shipping taxable or non-taxable in WooCommerce

Shipping fees can be taxable or non-taxable depending on your local tax rules.

With WooCommerce and the Flat Rate Shipping plugin, you can easily configure whether your flat rate shipping charge should include tax or be tax-exempt.

This guide explains how to configure your Flat Rate shipping fee to either apply taxes or remain tax-free. (Plugin feature: Taxable/Non-Taxable Shipping)

For example, you might set a $10 Flat Rate shipping fee to be taxable if your state considers shipping part of the taxable sale, or keep it tax-exempt if your laws allow.

The Flat Rate Shipping Plugin for WooCommerce makes it easy to set tax preferences for any shipping method without affecting other rates.

Preconditions

• Flat Rate Shipping Plugin is installed and activated.
• WooCommerce tax settings enabled (WooCommerce → Settings → General → Enable Taxes).
• Knowledge of your region’s tax rules for shipping fees.

Step-by-Step Instructions to Set Up

Step 1 – Access Flat Rate Shipping Settings

1. Go to Dashboard → Flat Rate → Manage Shipping.
2. Click Edit for the shipping method you want to adjust.

Step 2 – Set the Tax Status

1. Locate the Tax Status dropdown in the shipping method settings.

   Choose one of the following:

   • Taxable — The shipping fee will be taxed based on the product tax class.

   • None — The shipping fee will not be taxed.

     Example:

   • Title: Standard Shipping
   • Fee Type: Flat Rate
   • Fee Amount: $10
   • Tax Status: Taxable

Step 3 – Save and Test

1. Click Save Shipping Method.
2. Go to the checkout page and select the updated shipping method.
3. If set to Taxable, you should see tax calculated on the shipping fee.
4. If set to None, the tax should only apply to products (if applicable).

Alternate Uses

• Set express delivery fees as taxable, but keep free shipping tax-free.
• Use tax-exempt shipping for international orders where shipping isn’t taxed.
• Apply different tax statuses to different shipping zones.

Business Benefits

• Legal compliance with local tax regulations.
• Flexibility to apply tax rules to different shipping types.
• Transparency for customers with clear tax calculations at checkout.

Expected Outcome

Once configured:

• Your Flat Rate shipping method will apply or skip taxes as per your settings.
• Checkout will display tax amounts based on your chosen tax status.
• Your store will remain compliant and avoid incorrect tax charges.