Add a surcharge to customer invoice payments with QuickBooks Payments

Adding a surcharge with QuickBooks Payments is currently in beta and not yet available to all users. If you don’t see it in your account, it hasn’t been enabled for you yet.

You can pass along payment processing costs to your customers by adding a surcharge to credit card and ACH bank payments on invoices. When you turn on surcharging, your customers will see the surcharge fee when they pay an invoice online.

The surcharge is calculated on the full invoice amount, which includes both the subtotal and applicable sales tax. Your customers can choose to pay without the surcharge by selecting a different enabled payment method, such as Paypal, Venmo, Affirm Buy now, Pay later or check.

Before you turn this on: Credit card surcharging is subject to federal and state laws, as well as card network rules. It's not permitted in all states, and there are specific disclosure, notification, and rate cap requirements you must follow. You're responsible for ensuring compliance with all laws and rules applicable in your jurisdiction. Enabling surcharging will also disable Discover and American Express as accepted payment methods for online invoice payments. If your customers regularly pay with these cards, consider whether surcharging is right for your business. Read the full Legal and compliance requirements section below before you enable this feature.

In this article:

• Turn on surcharging
• What your customer sees
• Turn off surcharging
• Legal and compliance requirements
• Card network rules
• ACH bank transfer surcharges
• Sales tax
• Reporting and reconciliation
• Best practices
• Frequently asked questions

Turn on surcharging

To turn on surcharging at the company level from Settings:

1. Go to Settings and select Account and settings.
2. Select Sales.
3. In the Invoice payments section, select Edit .
4. Turn on Percentage based surcharging and choose Credit card, ACH bank payments, or both.
5. Review the compliance acknowledgment and select the checkbox to confirm you have read and agree to the surcharging terms.
6. Select Save.

To turn on surcharging at the company level from an invoice:

1. Create a new invoice, or open an existing one.
2. Select Manage to open the invoice settings panel.
3. Select the Payment methods section.
4. Select Setup next to Surcharging
5. Choose Credit card, ACH bank payments, or both. 
6. Review the compliance acknowledgment and surcharging terms.
7. Select Apply to future invoices.
8. Finish creating your invoice.

Payment method availability with surcharging

When you turn on surcharging, QuickBooks automatically updates your available payment methods.

Eligible for surcharging

When you turn on surcharging, the following methods will remain available, and a surcharge fee will be applied to the transaction:

• Credit cards: Visa and Mastercard.
• Bank transfers (ACH)

Available, but not eligible for surcharge

To give your customers more flexibility, if enabled, these methods remain active but will never include a surcharge fee. If your customer pays with one of these payment methods, you will be responsible for the processing fee:

• PayPal and Venmo
• Affirm Buy Now, Pay Later

Automatically disabled payment methods

The following methods are unavailable to your customers when surcharging is turned on:

• Debit and prepaid cards: Currently not supported for surcharge-enabled invoices.
• Specific card networks: American Express and Discover are currently not supported for surcharge-enabled invoices.
• Apple Pay: Currently not supported for surcharge-enabled invoices.

Note: If you or your customer prefer to use any of these methods, you can turn off surcharging for that specific invoice. Once surcharging is disabled, these payment methods will become available for your customer.

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What your customer sees

When your customer opens an invoice payment link and selects a payment method that is eligible for surcharging, they will see the following before confirming the payment:

• The original invoice amount.
• A line item showing the surcharge amount and percentage.
• The total amount including the surcharge.

Note: To preview what your customer will see before sending, go to the invoice editing screen and select the Payor view tab.

Turn off surcharging

To turn off surcharging at the company level from Settings:

1. Go to Settings and select Account and settings.
2. Select Sales.
3. In the Invoice payments section, select Edit .
4. Turn off Percentage based surcharging.
5. Select Save.

Turning off surcharging at the company level only affects future invoices. Payments already completed with a surcharge aren't changed.

To turn off surcharging for an invoice:

1. Create a new invoice, or open an existing one.
2. Select Manage to open the invoice settings panel.
3. Select the Payment methods section.
4. Turn off Surcharging
5. Finish creating your invoice.

Note: Disabling the surcharge on a single invoice only applies to that specific transaction; it does not affect your company level settings, and future invoices will still include a surcharge.

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Legal and compliance requirements

Credit card surcharging is regulated at both the state and card network level. In addition to card network rules, you must follow federal and state laws applicable to surcharging and laws prohibiting deceptive or misleading disclosures. These laws change from time to time and vary by jurisdictions. You're responsible for confirming that surcharging is permitted in your jurisdiction and for meeting all applicable requirements before you enable this feature.

States and U.S. Territories where credit card surcharging is prohibited

If the person to whom you’re sending an invoice is located in one of the following states or U.S. Territories, you should consult with your legal advisor before applying a surcharge because some jurisdictions prohibit surcharging or have specific restrictions:

States with specific restrictions

Several other states permit surcharging but impose conditions that may affect your use of this feature:

Beyond these specific state-level rules, other laws may apply to your business or location that impose additional or different disclosure requirements. You're responsible for checking whether any such requirements apply and taking any steps necessary to comply.

Important: Surcharge laws change frequently. This list is provided for informational purposes and may not reflect the most recent changes. Check with your state's Attorney General office, consumer protection agency, or your own legal counsel for current rules before you enable surcharging.

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Card network rules

Visa, Mastercard, and other card networks have rules that apply to credit card surcharging regardless of your state. Failure to comply with card network surcharge rules can result in fines starting at $1,000 per violation, which may escalate for repeated violations, and the loss of your ability to apply surcharging. Networks are actively enforcing their surcharge rules. Key requirements include:

Surcharge caps

Credit card surcharges are subject to card network rules, which may vary by brand. In general, the surcharge must not exceed your actual cost of acceptance and must comply with any applicable network-imposed caps. The surcharge must be calculated as a percentage of the transaction subtotal, not as a fixed fee, and cannot be used to generate profit.

Note: The credit card surcharge rate offered by QuickBooks is designed to remain within the cap set by card network rules. However, if your actual processing cost is lower than 2.9%, some states (such as New York and New Jersey) require that your surcharge not exceed your actual cost, and Oklahoma requires that your surcharge rate not exceed 2%, regardless of your actual cost. Review your processing rate in your QuickBooks Payments account and consult your legal counsel if you're unsure.

Debit and prepaid cards

Surcharges may be applied only to credit card transactions. Debit cards and prepaid cards can't be surcharged under any circumstances. This includes transactions where a debit card is processed as credit (signature instead of PIN). When surcharging is turned on, customers paying with a debit or prepaid card will be blocked and prompted to use a credit card instead. Additionally, Apple Pay will be unavailable to customers.

Uniform application across card networks

If you surcharge credit card payments, you must apply the same surcharge rate to all credit card brands you accept (Visa, Mastercard). You can't charge different surcharge rates for different card networks.

No conflicting fees

Card brand rules don't allow a surcharge and a separate convenience fee on the same transaction. If you currently charge a convenience fee, service fee, or similar fee on invoice payments, you must remove it before you enable surcharging.

Disclosure requirements

Card brand rules and many state laws require that you clearly disclose the surcharge to your customer before they complete payment. The surcharge must appear as a separate line item on the payment confirmation and receipt, stating both the percentage applied and the dollar amount. QuickBooks handles these checkout page disclosures and receipt requirements automatically for invoice payments. In some states, you may be required to communicate the surcharge amount to your customers at the time you communicate pricing for your goods or services, or on the homepage of your website. Consult your state’s rules to be sure.

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ACH bank transfer surcharges

ACH payments are governed by NACHA Operating Rules and applicable federal and state consumer protection laws — not Visa or Mastercard surcharge rules, since no card network is involved in the transaction. State consumer protection laws may apply to fees charged on electronic fund transfers.

Before enabling the ACH surcharge feature, confirm with your legal counsel that charging a fee for ACH payments is permitted in your state.

Sales tax

Credit card surcharges are generally subject to sales tax. The tax treatment of surcharges can vary by state. For example, credit card surcharges may not be subject to sales tax in Colorado. Consult a tax advisor if you have specific questions about whether sales tax applies to surcharges in your state.

Reporting and reconciliation

Surcharge amounts are tracked separately in QuickBooks so you can see exactly how much you've collected.

• Surcharges appear as a separate line item in each transaction record.
• You can run a Transaction Detail report filtered by surcharge income to review totals for any date range.
• Surcharge revenue is recorded in the income account you designate during setup.

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Best practices

Surcharging can help you recover processing costs, but it can also affect customer satisfaction. Here are some things to keep in mind:

• Communicate your policy clearly. Let your customers know about your surcharge policy before they receive an invoice. For example, include it in your payment terms, engagement letters, or on your website. Transparency helps maintain trust.
• Offer multiple payment options. Give customers the option to pay by methods that don't carry a surcharge, such as check, Paypal, Venmo or Affirm Buy now, Pay later.
• Review your surcharge rate regularly. Make sure your surcharge rate stays in line with your actual processing costs. If your processing costs change, review whether your surcharge rate is still appropriate and compliant.
• Check for conflicting fees. Card brand rules don't allow a surcharge and a separate convenience fee on the same transaction. If you currently charge a convenience fee on invoice payments, you must remove it before you enable surcharging.
• Monitor customer feedback. Pay attention to how your customers respond. If you see an increase in late payments or customer complaints, consider adjusting your approach.
• Stay current on the law. Surcharge rules are affected by new legislation, court decisions, and changes to card network policies. Review your compliance periodically, especially if you do business in multiple states.

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Frequently asked questions

Is surcharging available in my QuickBooks Payments account?

Surcharging is currently in beta and not yet available to all users. It's being rolled out gradually. If you don't see the option in your account, it hasn't been enabled for you yet.

Can I set a custom surcharge percentage?

Not at this time. The surcharge rate is fixed for credit card payments and for ACH bank transfer payments. If you're in a state that caps surcharges below the rate provided by QuickBooks, don't enable the credit card surcharge feature unless the rate complies with your state's cap.

Can I turn on or off surcharging for different customers or invoices?

Yes. After surcharging is enabled, you can toggle it on or off for each individual invoice from the Manage panel under Payment methods.

Is the surcharge applied to recurring invoices?

Yes. If you have surcharging turned on, it applies to all invoices paid online through QuickBooks, including recurring invoices.

What happens if my customer pays with a debit card?

Customers can't complete payment using a debit or prepaid card on a surcharged invoice. When surcharging is enabled, QuickBooks Payments only accepts credit cards and ACH bank transfers. Customers attempting to pay with a debit or prepaid card will be blocked and prompted to use a credit card instead. In the event you elect to accept payment via debit card, surcharging must be disabled for the applicable transaction. When surcharging is disabled, all standard payment processing fees will be borne by you and will not be passed to your customer. 

Can I surcharge in-person payments?

Surcharging is not available for in-person payments at this time. This feature applies only to online invoice payments made through QuickBooks Payments. It doesn't apply to in-person payments, payments made outside of QuickBooks, or manual payments recorded in QuickBooks.

What if I issue a refund on a surcharged payment?

When you refund a payment that included a surcharge, the surcharge amount is included in the full refund. If you issue a partial refund, the surcharge portion is prorated accordingly.

Do I need to notify Visa or Mastercard separately?

No. When you turn on surcharging in QuickBooks Payments, the required card network notifications are handled on your behalf. 

Can I charge different surcharge rates for different card brands?

No. Card network rules require that if you surcharge credit card payments, you must apply the same surcharge rate to all credit card brands you accept (Visa, Mastercard) and on the same terms for every credit card transaction.

Are all payment methods eligible for surcharging?

No. Surcharging applies only to credit card and ACH bank transfer payments. The following payment methods are excluded and won’t have a surcharge applied:

• PayPal
• Venmo
• Affirm Buy now, Pay later 
• Debit cards
• Amex and Discover Credit Cards

Can I apply both a surcharge and a convenience fee?

No. Card brand rules don't permit a surcharge and a separate convenience fee on the same transaction. If you currently charge a convenience fee for online invoice payments, you must disable it before turning on surcharging.

I'm not sure if surcharging is legal in my state. What should I do?

Surcharge laws vary by state and change over time. If you're unsure whether surcharging is permitted where you do business, consult your legal counsel or contact your state's Attorney General office before you enable this feature. QuickBooks doesn't provide legal advice.

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Disclaimer: This content is provided for informational purposes only and is not intended as legal, tax, or other professional advice. You are responsible for your own compliance with laws and regulations, including card network rules. Please contact an attorney or other relevant advisor for advice specific to your circumstances. This article applies to U.S. and U.S. territories only.