Set Up Automated Taxes in Squarespace for Your Business

Automate tax settings in Squarespace to streamline compliance and avoid costly errors while managing online sales effectively.

Set Up Squarespace Automated Taxes

TL;DR:

  • Automate tax calculations for US sales tax, VAT, and GST through Squarespace
  • Get professional tax advice and register with authorities before starting
  • Remove existing tax settings from PayPal or other payment systems to avoid conflicts
  • Switch from manual to automated in the Taxes panel, then add your registrations
  • Choose whether to display taxes at checkout or include them in prices
  • Fees start from January 2026, ranging from 0.05% to 0.15% per transaction

Before you start the technical setup, make sure your business is registered with the relevant tax authorities. Squarespace can't help with this registration process, so get professional advice if you're not sure what you need to do. You'll also want to remove any existing tax settings from payment systems like PayPal to prevent conflicts.

Switching to Automated Tax Setup

Your starting point depends on your current tax arrangement:

No existing setup: Head to the Taxes panel and select 'Automated' under calculation method.

Manual tax setup: Switch to automated within the Taxes panel.

Currently using TaxJar: Disconnect TaxJar first, then choose 'Automated'.

Adding Your Business Information

If you're using Squarespace Payments, your business details might already be in place. For everyone else, check that:

  • Your business details are current
  • Your tax address is correct
  • Your default product tax code is set appropriately

Registering Your Tax Locations

This is where you tell Squarespace where you're registered to collect taxes:

  1. Go to the 'Add Registrations' section in the Taxes panel
  2. Choose your locations and their registration types

Be thorough here. Missing a registration means you won't collect tax where you should be collecting it.

Setting Up Tax Display

You need to decide how customers see taxes. You can either add them at checkout or include them in your listed prices. Change this setting in the Taxes panel under 'Applying tax'.

Most businesses add taxes at checkout because it's clearer for customers, but check what works best for your market.

Always run a few test transactions after setup to make sure taxes are calculating correctly. Place orders from different locations to see how the system handles various tax rates.

Understanding the Costs

From January 2026, Squarespace will charge fees for automated tax calculations:

  • Business and Core plans: 0.15% per transaction
  • Advanced and Commerce Advanced plans: 0.05% per transaction

Factor these costs into your pricing when the fees start.

FAQs

How does my store know which tax rate to apply?
The system uses real-time data from your business location, customer location, and your registered tax areas to calculate the right tax rate automatically.

Why didn't my store charge sales tax on an order?
Either there's a setup issue or the customer's address is outside your tax collection regions. Double-check that your registrations match where you're legally required to collect tax.

Can I use automated taxes with TaxJar at the same time?
No, you have to pick one. Disconnect TaxJar completely before enabling automated taxes.

What happens if I have products with different tax rates?
Set up different tax codes for different product types. The system will apply the correct rate based on the product and customer location.

Jargon Buster

Automated Tax Rates: Tax calculations based on your business locations and where your customers are located

Tax Registrations: Official paperwork filed with tax authorities for regions where you collect taxes

Squarespace Payments: Squarespace's built-in payment processing system

Tax Code: A category that determines how a product gets taxed

Wrap-up

Automated taxes take the guesswork out of tax calculations, especially when you're selling to multiple regions with different rates and rules. The key is getting your registrations right from the start. Work with a tax professional to make sure you're registered in all the right places, then use Squarespace's system to handle the calculations automatically.

Review your settings regularly, especially if you expand to new markets or change your product mix. With fees starting in 2026, factor those costs into your planning, but remember that automated compliance is usually worth the investment.

Ready to master more Squarespace features? Join Pixelhaze Academy for step-by-step tutorials and expert guidance.

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