When a tax receipt is processed, the system calculates the following.
1.It looks at how much money is available
The system adds together:
- Any balance already sitting on the account
- Any new payments made
- Any adjustments made to payments
This tells the system the total funds available to apply.
2. The system calculates what the payer actually owes
The system takes:
- The total fees
- Minus any discounts or reductions (eg: subsidy or grant reductions to amount billed)
This gives the true amount billed to the customer.
3. The system applies the payment
It applies as much of the available money as possible — but:
- It never give a tax receipt for more than what’s owed, and
- It never uses more money than what’s available.
What happens next?
- If the payment doesn’t fully cover the fees → there will be a remaining balance owing.
- If the payment is more than the fees → the extra stays on the payer’s account as a credit balance.
- If they match exactly → the account is fully settled.
In Short:
The system applies the available payment to the payer’s fees, up to the amount owed. If there’s not enough, a balance remains. If there’s extra, it stays as a credit. You can remove any outstanding closing payment balances by posting a payment adjustment.
Calculation of the tax receipt total: Net of the receipt is the payment total less the non-claimable total, unless the closing fee balance is higher than the payment total.