What category do I file Paypal Fees under?

Hello TheDesignHero

For Paypal fees you can create a new chart of account for Paypal fees.

To do this go to accounting> chart of accounts> new> expenses> detail type you can use the one you mentioned or bank charges (as this is for fees you pay to financial institutions)>name-name it Paypal fees>save

That way you can when when you run a report on expenses see what you are spending on Paypal fees

Any questions on this just reply back to this post.

Thanks

Emma

Hey Emily, I unfortunately don't have that option in Quickbooks self employed. Is there another way I can do that or some other way I can categorise the fees correctly? Currently they're under professional fees, does that work?

Also I have the same kind of question in regards to Paypal but with payments from other currencies. Currently I have it showing up like this:

Payment from Customer : + 1000 CAD

Conversion fee -  Currency Conversion (debit) - To British Pound :-CA$955.70

Currency Conversion (credit) - From Canadian Dollar - +£552.04

How do I go about categorizing this correctly? I have currently got the +552.04 as credit to my account as that is the actual money that went in, but I somehow need to minus the fees I've been charged. Do I need to do this manually?

Hi TheDesginHero

You should be categorising Paypal fees under Other financial Charges, we have enclosed a link.

https://quickbooks.intuit.com/community/Taxes-and-Year-End/About-SA103F-Categories/td-p/239287

You will also have to record multi-currency payments manually in GBP.

I run an online Store via ebay and have been advised by my accountant that if I do it the way you have suggested there is a £500 limit on Bank and Finance charges.

My Paypal fees and I suppose many others using the SE Quickbooks will have over £500 fees and they will be wrongly recorded in Qucikbooks as when they go over the £500 limit anything above that will be a disallowable expense.

Paypal isnt a bank as such in the UK and all PayPal fees should be allowed as an expense in your accounts.  They are transaction/Merchant fees based on individual transactions

Surely this is bad advice you are giving ?    

Can I ask what you categorise your PayPal fees as please? It totally makes sense what you’re saying.