I have a problem with the discount calculation in PayPal in combination with Magento. So far I just found other questions related to rounding problems or similar in PayPal and not comparable with my issue.

I use Magento CE

The Problem:

PayPal works great when there is no discount. It takes the

  • net subtotal
  • net shipping costs
  • the tax
  • grand total incl. tax

and everything is fine.

But when the user gets a %-discount, PayPal still calculates the tax based on the subtotal (without subtracting the discount). I hope the following image will clarify the issue.

enter image description here

In short:

  • discount has to be excl. tax
  • subtotal has to 'contain' the discount excl. tax
  • tax has to be calculated after discount substraction

The grand total in PayPal fits, because the tax of the discount effect (2,11€) moved from subtotal to tax.

An Approach:

Tell PayPal to use the discount excl. tax und calculate the tax after the discount has been subtracted from the subtotal.


How do I manage that?

Thanks in advance!

Edit 1: PayPal Express is in Sandbox mode (if that is important to know)

Edit 2: Sry, with "PayPal caluclates", I mean the Service PayPal, the Magento extension or the whole payment process related to PayPal ;)

Here are my tax configuration settings:

enter image description here enter image description here

1 Answer 1


Paypal doesn't calculate tax. Magento does and passes the information along.

Based on the updated information looks like you need to change tax setting apply discounts on prices to 'excluding tax' to get the correct tax calculation.

  • I've added the tax configuration settings to my question description.
    – Nick
    Commented Mar 12, 2015 at 13:57
  • If I change this option, the calculation in magento and paypal get wrong. I think the settings are ok. In the first image on the right side, there is the magento calculation with incl. tax for the subtotal, shipping, tax and grand total amount. PayPal however, receives the excl. tax amount and calculates the tax totally wrong. Anothe question: How can I display the totals in PayPal checkout as the same as in the card? Like in the first image on the right side, the magento calculation.
    – Nick
    Commented Mar 12, 2015 at 20:14
  • Following up on this. We're tracking as a bug - internal JIRA ticket MPERF-6598 . Linking stack exchange conversation to the bug.
    – Chuck
    Commented May 26, 2015 at 15:34
  • @Chuck I have a same problem. Please revert with solution Commented Sep 4, 2018 at 0:30

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.