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Rashed54
Level 1

Sale Tax and Paypal fee

Please help me:

I sold an item for 317.59 and Paypal charge. In which amount, I should calculate sales tax @20%? Before deducting Paypal fee on 317.59 or after deducting Paypal fee on 303.54? Thanks in advance.

5 Comments
Jen_D
Moderator

Sale Tax and Paypal fee

I appreciate your time checking this with us, @Rashed54,

 

Normally, sales tax is charged to the products you sell before the fees. In Sweden, sales tax is charged to customers based on the purchase price of certain goods and services.

 

The formula should be gross sales (317.59 SEK) multiplied by 20% tax, then fees. I would still recommend contacting a tax advisor or agency to get further advice about charging sales tax based on your business type and agency regulations.

 

If you're processing sales in QuickBooks, we calculate the sales tax for you. Check out our Resource Page to learn more about handling taxes on sales: Tax for QuickBooks Online

 

Feel free to get in touch with us again if you have any other questions about QuickBooks. I'll be right here to help you anytime.

Rashed54
Level 1

Sale Tax and Paypal fee

Can I calculate tax amount (317.59/120)*20=87.25, if I guess this amount is inclusive tax?

MariaSoledadG
QuickBooks Team

Sale Tax and Paypal fee

Let's make sure to correctly enter your tax amounts, Rashed54.

 

QuiickBooks automatically creates a default tax code once you turn on tax tracking. You can create a Sales tax with a 20% rate. Here's how:

  1. From the left menu, select Taxes.
  2. Under the Related Tasks list on the right, select Add/edit tax rates and agencies.
  3. Select New and choose either a single or a combined tax rate.
  4. Enter a name for the tax, the agency you pay, and the percentage for the rate. Use a single rate if you pay just one rate to a single agency.
  5. Click Save.

Then, choosing it as inclusive or exclusive depends on what you're going to select in your invoice. I've attached a screenshot for your guide.

 

For future reference, you can run reports in QuickBooks Online to give you different aspects for your business: Run Reports In QuickBooks Online.

 

Keep in touch if you have any other concerns. I'll always be right here to help.

Rashed
Level 1

Sale Tax and Paypal fee

How I will record PayPal fee in Quickbooks? Thanks in advance

RCV
QuickBooks Team
QuickBooks Team

Sale Tax and Paypal fee

I've got some steps on how to record your PayPal fee in Quickbooks Online (QBO), Rashed.

 

To record it in QBO, let's set up a Bank Charges account to track the fee. Let me show you how:

 

  1. Go to Accounting on the left menu.
  2. Choose Chart of Accounts.
  3. Tick the New tab. 
  4. Select Expenses in the Account type drop-down.
  5. Choose Bank Charges in the Detail Type drop-down. 
  6. You can name it as Bank fees.
  7. Tap Save and Close.

Then, add the Paypal fee in the Bank Deposit window. This way, there's no need to edit the original transactions in QBO.

 

Here's how:

 

  1. Click the + New Plus button.
  2. Select Bank deposit under Other
  3. Go to the Add funds to this deposit section. Then, enter the fee as a line item.
  4. Choose PayPal as the bank charging you the fee in the Received From column.
  5. Select Bank Charges from the Account drop-down.
  6. Enter the fee as a negative number. For example, if the fee was $.50, enter –.50.
  7. Review the deposit total with the bank fee.
  8. Press Save and close.

The total amount should be the same as the one reflected on your actual bank account.

 

For more details about recording bank deposits, check out this article: Record and make Bank Deposits in QuickBooks Online.

 

Feel free to visit our Banking page for more insights about managing your bank transactions.

 

You can always count on me if you need a hand with categorising your bank transactions. I'm always here to address them for you.