How To Configure Tax Classes In Magento 2

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As an ecommerce platform, Magento 2 offers a wide range of features that make it easy to handle different aspects of online sales. Among these features is the ability to configure tax classes, which is an important aspect of any ecommerce setup. In this guide, we’ll look at what tax classes are, why they’re important, and how to configure them in Magento 2.

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What are tax classes?

In simple terms, a tax class is a grouping of products or services that share the same tax rate. Magento 2 allows store owners to define an unlimited number of tax classes, each with its own set of tax rules. Tax classes can be applied to product prices, shipping rates, and other fees.

For example, if you sell t-shirts and pants, you can create two tax classes, one for t-shirts and one for pants. You can then assign a tax rate to each tax class. If the tax rate for t-shirts is 10%, any t-shirt that you sell will have an additional 10% tax added to its price.

Why are tax classes important?

When it comes to ecommerce, taxes can be a complex issue. Different products may have different tax rates, and these rates may vary depending on the location of your customers. Tax classes make it easier to manage these complexities by enabling you to assign tax rates to specific groups of products.

By using tax classes, you can create custom tax rules that are specific to your business needs. For example, if you sell food items, you may be required to charge a lower tax rate compared to other goods. Tax classes make it easy to implement such rules.

How to configure tax classes in Magento 2

Configuring tax classes in Magento 2 is a straightforward process. Here are the steps you need to follow:

Step 1: Log in to your Magento 2 dashboard

The first step to configuring tax classes in Magento 2 is to log in to your administrator account on the Magento 2 dashboard. Once you’ve logged in, you’ll be taken to the home page of your dashboard.

Step 2: Navigate to the tax settings

Next, click on “Stores” in the main menu, and then select “Configuration” from the dropdown menu. On the configuration page, navigate to “Sales” and click on “Tax” from the menu on the left-hand side.

Step 3: Create your tax classes

On the tax settings page, you’ll see an option to “Tax Classes.” Click on this option to create a new tax class. Magento 2 provides three default tax classes: “Taxable Goods,” “Shipping,” and “Gift Cards.” You can use these default classes or create new ones.

Once you click on the “Add New Tax Class” button, you’ll be prompted to enter a name for your tax class. Choose a name that makes sense to you, such as “Clothing” or “Digital Products.”

Step 4: Assign tax rates to your tax classes

After you’ve created your tax classes, you’ll need to assign tax rates to each class. To do this, click on “Tax Rates” on the left-hand menu. Magento 2 provides a default tax rate for your store, but you can change this rate or create additional rates.

Click on “Add New Tax Rate” to create a new tax rate. You’ll be prompted to enter a name for your tax rate, such as “Standard Tax Rate” or “Food Tax Rate.” You’ll also need to enter the percentage rate for the tax.

Step 5: Associate your tax rates with your tax classes

Once you’ve created your tax rates, you’ll need to associate them with your tax classes. Click on “Tax Rules” on the left-hand menu, and then click on “Add New Tax Rule.”

On the tax rule page, you’ll be prompted to select a priority for your rule and a customer tax class. Next, select the product tax class that you want to add the rule to. Finally, select the tax rate that you want to associate with the tax class.

Step 6: Save your configuration

After you’ve created your tax classes and associated them with tax rates, click on “Save Config” to save your configuration changes.


Tax classes are an important feature of any ecommerce setup, and Magento 2 makes it easy to configure them. By grouping products into specific tax classes, you can apply custom tax rules and rates that comply with local regulations and meet your business needs. Configuring tax classes in Magento 2 takes only a few steps, and it’s a worthwhile investment of your time if you want to streamline your tax management process.

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