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Customer surcharging for online payments

Online invoice payments offer businesses the option to pass on the surcharge associated with online payments to their customers. That means that the surcharge for card payments can be added to a customer invoice.

When you pass on the surcharge to your customer, your customer pays the 2.7% surcharge for online invoice payments (VISA, Mastercard, Apple Pay or Google PayTM).

GST on surcharges

If you pass on the surcharge and there’s GST on your invoice, GST will also apply to the surcharge. GST is applied to the surcharge because providing a payment service is considered part of the sale. For more information, see IR’s GST on surcharges page.

For example, if you sell taxable goods and services, such as shoes, and provide an online payment service that has a surcharge, then you are selling the:

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    shoes, and

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    payment service.

As a result, the surcharge incurs GST at the same rate as the shoes.

Turning surcharging on and off

When you set up online payments, you chose if you wanted to pass on the surcharge to customers. You can turn this on or off whenever you like.

Next, you just need to create and send invoices like you normally would.

FAQs