Sales tax rounding and small variances

When reviewing your Showpass reports, you may notice that the total sales tax collected does not match exactly when you multiply your total net revenue by the tax rate. This is expected behaviour and occurs because of standard rounding rules used in all payment systems.

This article explains why this happens and how to interpret small differences in your reports.

How Showpass calculates sales tax

Sales tax is calculated per invoice/line item, based on the item price and the tax rate you've set for your venue. Since currency can only be charged in cents, the tax amount for each transaction must be rounded to the nearest cent.

In many cases, the exact tax calculation produces a value with several decimal places. Because that amount cannot be charged directly, it is rounded up or down to the nearest cent. This rounded value is what appears on the buyer’s receipt and in your reports.

This rounding step is required by all payment processors, accounting tools, and tax systems.

Why report totals may not match a simple percentage

When accountants validate tax totals, they often multiply:

total net revenue × tax rate

However, this “top-down” method rarely matches the true tax collected because:

• Tax is calculated and rounded for each individual transaction.
• Each transaction may round slightly up or down.
• These tiny differences accumulate across many sales.

The result is a normal, expected variance of a few cents when comparing:

• Bottom-up totals: the sum of all rounded tax amounts, and
• Top-down totals: a percentage applied to aggregated revenue.

This difference is known as cumulative rounding variance.

A simple illustration

Imagine a product price and tax rate that produce a tax amount with more than two decimal places. When that tax is rounded to the nearest cent, it becomes slightly higher or lower than the exact percentage.

When this rounded amount is later used in reporting or reconciliation, it will not perfectly match the original percentage if you try to reverse the calculation. This is a natural mathematical effect of rounding and is not an error.

Over many transactions, these fractions of a cent create a small variance in the total tax collected.

For more background, TaxJar (a leading tax calculation platform) explains the same behaviour here:
Sales tax rounding in your report and your sales tax return .

Is this normal?

Yes — this behaviour is standard across the industry. Any system that calculates tax per transaction and rounds to the nearest cent will show small differences when compared to a simple percentage of total revenue.

The tax amounts in your Showpass reports reflect the actual amounts collected from ticket buyers.

How accountants typically handle this

Most bookkeeping systems allow a small adjustment line, such as “rounding gain/loss,” to account for these unavoidable differences. This keeps financial reports accurate while recognizing standard rounding behaviour.

Key takeaways

• Your configured tax rate is being applied correctly on each sale.
• Minor differences in totals are caused by normal rounding to the nearest cent.
• These variances are expected and common across all tax and payment systems.

If you have questions about how this appears in your reports or exports, feel free to share an example with our team — we’re happy to walk through it together.

Most accounting teams handle these small differences by:

• Accepting the Showpass tax total as the accurate amount collected from ticket buyers, and
• Recording a small adjustment line (for example, “sales tax rounding gain/loss”) in their accounting system if needed.

This ensures your books stay balanced while recognising that rounding to the nearest cent will rarely match a simple percentage applied to an aggregated total.

Key takeaways

• Your configured tax rate is being applied correctly on each transaction.
• Small variances of a few cents in your reports are caused by normal rounding to the nearest cent.
• These differences are expected and common across payment, tax, and accounting platforms.

If you have specific questions about how this appears in your own custom reports or exports, please share an example with our team and we will be happy to walk through it with you.