Magento is not adding the tax rate correctly

Question

I'm trying to setup the tax rates for a client but for some reason the calculation is wrong.

New Zealand's tax rate is 15%. I only want to tax the sub total and show that. Shouldn't it be 23*0.15 = $3.45?

Current settings in Configuration -> Tax

Tax Class

• Tax Class for Shipping - Taxable Goods

Calculation Settings

• Tax Calculation Method Based On - total

• Tax Calculation Based On - shipping Address

• Catalog Prices - Including Tax

• Shipping Prices - Including Tax

• Apply Customer Tax - Before Discount

• Apply Discount On Prices - Excluding tax

• Apply Tax On - Custom Price if Available

Price Display Settings

• Display Product Prices In Catalog - Including Tax
• Display Shipping Prices - Including Tax

Shopping Cart Display Settings

• Display Prices - Including Tax
• Display Subtotal - Including Tax
• Display Shipping Amount - Including Tax

Orders, Invoices, Credit Memos Display Settings

• Display Prices - Including Tax
• Display Subtotal - Including Tax
• Display Shipping Amount - Including Tax

Answer 1

You have set all your prices to already include tax so that means that the value 23.00 NZD is a combination of 20 NZD for the product and 3 NDZ of tax. The same goes for the shipping costs so that is 3.48 NZD for the shipping plus 0.52 NZD for the tax.