The ATO treats payment processing fees as an ordinary business operating expense — the same as bank fees and other day-to-day costs of running your practice. Most practices don't realise how much these fees add up to across a full year, which makes it worth getting right.
This article is general information, not tax advice. Speak with your accountant or registered tax agent for guidance specific to your situation.
Two ways to claim
There are two ways to recover the cost of payment processing fees, and if your practice is registered for GST, you can use both:
Business expense deduction
The first is as a business expense deduction on your annual tax return. Payment processing fees reduce your taxable income directly — your accountant will record them as an operating expense alongside other costs of running the practice. Across a full year of card volume, the total deduction is often more than practices expect.
Through your BAS
The second is through your BAS. Stripe charges 10% GST on its processing fees for Australian businesses, and if your practice is GST-registered, you can claim that GST back as an input tax credit each quarter. To use a simple example: if you pay $500 in fees plus $50 GST in a month, the $50 comes back through your BAS and the $500 is claimed as a tax deduction at year end.
Both claims are supported by the monthly tax invoices Stripe issues through your Dashboard. These include Stripe's ABN, the fee breakdown, and the GST amount — everything the ATO requires. Your accountant or bookkeeper will need these invoices, so it is worth downloading them each month and keeping them on file.
Record-keeping
The ATO requires you to keep records for five years. For payment processing fees, that means your monthly Stripe tax invoices and your accounting software records. If Splose Payments is connected to Xero, the fees will flow through automatically — but check that they are coded as GST-inclusive rather than GST-free, otherwise you will miss the GST credits on your BAS.
For questions about how Splose Payments fees appear in your account, contact our support team. For questions about your specific tax situation, speak with your accountant.