When an agent is set as Non-Taxable because they do not have a GST/HST number yet, there may still be brokerage deductions or other brokerage income that are taxable. In this case, the brokerage is responsible for reporting and remitting the applicable GST/HST (sales tax) on both the commission and the taxable brokerage income.

Steps

1. Set the agent as non-taxable
   • Go to the agent’s profile.
   • Set Taxable = No.
     
     
2. Enter the commission and deductions
   • Loft will calculate the tax on the agent’s commission as Company Tax.
   • For taxable brokerage deductions, the tax may not automatically appear as a separate amount on the agent’s transaction. 
     
     
3. Include the tax in the deduction
   • For example, if a $600 brokerage deduction is taxable at 5%, the total deduction should be $630 ($600 + $30 GST).
   • Override the deduction to $630 so the agent’s net payout is correct.
     
     
     
4. Record the tax correctly in Xero/QBO
   • Find the related bill.
   • Edit the deduction line to reflect the $600 taxable income.
   • Change the tax treatment from Exempt 0% to the appropriate Loft Tax on Sale 5%.
   • Xero/QBO will calculate the $30 GST separately.
     
     

Important: The agent being non-taxable does not necessarily mean the brokerage deduction is non-taxable. If the brokerage is required to charge and remit GST/HST on that income, the tax needs to be accounted for at the brokerage level.