The purpose of this document is to outline how to process and add on Credit Card Fees
Customer Payment
Go to Order Entry > File > Customer Orders, find and highlight the customer order and click the
receipt icon in the tool bar.
Payment date is the date the payment made; Choose the appropriate register (likely EFT / Credit Cards). The total to be posted in the Card field will be the balance owing on the invoice plus the credit card fee.
In this example the balance owing on the invoice is $3,207.60. The credit card fee is 1.5% or
$48.11 so total to pay is 3,255.71. Following is a receipt ready to post.
1. Due amount is the balance of the invoice
2. Card amount is invoice balance plus credit card fee
3. Discount amount is the add on for credit card fee. This is a negative number as it is additional income
4. The GL account code at the Discount Account should be changed to the GL account where you want to post the credit card fee. In this example we have chosen 4020 Credit Card Fee Income. Use the F8 key at Discount Account to find the appropriate GL account code to post the discount portion to.
5. Tendered amount is the sum of the balance owing on the invoice and credit card fee.
The Receipt will come up for printing:
Click the Receipt button to preview the receipt.
1. and 2. Discount is the Credit Card Fee
3. Payment(s) amount is the order payments plus the credit card fee
4. Balance Due $0.00
Word Merge
Alternatively, if you want to show the Credit Card Fee then you’ll need to use Word Merge to create a
Invoice / Credit Card Tax Receipt.
Once the payment has been taken you will be returned to the browse screen.
Click on the Word Merge Icon in the tool bar.
A window “Merge Invoice Date with Word Document” box will show next:
Click the F8 keys to select word document to merge with and select directory to save invoice to
Click Merge & Open the Invoice / Credit Card Fee Receipt to continue.
The word application will open, and the Word Merge Invoice / Credit Card Fee Tax Receipt will show.
GST for both the invoice and the Credit Card Fee is displayed.
General Ledger Posting
1. Job Costed Invoices; The invoice payment portion will post to Accounts Receivable (Trade Debtors). DR Bank; Credit Accounts Receivable
2. Un-Job Costed Invoices; the invoice payment portion will post to Customer Deposits. DR Bank; CR Customer Deposits
3. Credit Card Fee will post to the GL account chosen when posting the credit card fee on the receipt. In this example GL 4020 Credit Card Fee Income.
IMPORTANT INFORMATION: A GL journal will be required to move the GST Collection portion to GST
Collected (Sales). Refer to your financial advisor as to frequency of posting this General Ledger Batch Journal Entry but some suggestions are – Each day as part of balancing monies taken for the day;
Monthly by the office administrator as part of the month end close process or; by the financial advisor
at financial reporting time.
Credit Card Service Fee and GST
The following information is an explanation and government links as to why the credit card surcharge
contains GST Australia GST and Credit Card Service Fee Explanation:
The following information is regarding GST and the Credit Card Service from ATO – Australia
This issue is a public ruling for the purposes of section 105-60 of Schedule 1 to the Taxation
Administration Act 1953.
Yes. The surcharge is considered to form part of the price for the merchant's supply of goods or
services to the cardholder. It is a component of the consideration payable in respect of the supply.
Example 1: Purchase of a shirt- Taxable supply
Anastasia is in a store and decides to purchase a shirt. The shirt's price tag indicates that the price is
$55 (inclusive of GST). There is a sign at the counter indicating that a surcharge of 3% of the price
will be imposed if payment is made by credit card.
Anastasia decides to pay by credit card and the merchant imposes a surcharge of $1.65 in respect of
the sale. The price payable in respect of the shirt is now $56.65. As the supply of the shirt is a taxable
supply, the GST payable in respect of the sale is $5.15, being 1/11th of the GST inclusive price of
$56.65.
(End of example)
New Zealand GST and Credit Card Service Fee Explanation:
The following is information regarding GST and the Credit Card Service from IRD – New Zealand
CREDIT CARD SERVICE FEE AND GST
Clause 133
Issue: GST should apply to the credit card service fee Submission (New Zealand Institute of Chartered Accountants)
The scheme of the GST Act is that GST applies to all goods and services unless there are valid reasons
from departing from this. We do not see a case for departing from the scheme of the GST Act, which
the current wording of the bill would suggest.
The credit card service fee is not exempt from GST. The current wording of clause 133 “plus any
GST” infers that GST does apply, but it is the rate of GST that may vary. For example, an overseas-
based taxpayer who opts to pay their income tax debt by credit card will be subject to the credit
card service fee plus GST, but because they are not resident in New Zealand, the rate at which GST is
charged will be zero. Alternatively, a resident taxpayer who pays their income tax debt by credit card
will be subject to the credit card service fee plus GST at a rate of 15%
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