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Master accounting for Stripe fees with this step-by-step guide. Learn how to track, categorize, and report fees accurately for better financial management.
It’s one of the easiest financial mistakes to make: treating the money Stripe deposits in your bank as your total revenue. While it seems logical, this simple error skews your entire financial picture. It understates your gross sales and hides a significant business expense, making it difficult to accurately calculate your profit margins or customer acquisition costs. Mastering the process of accounting for Stripe fees is fundamental to gaining true financial clarity. We’ll show you how to separate gross revenue from expenses, handle complex scenarios like refunds and international payments, and build a reliable system for your books.
Before you can account for Stripe fees, you need to understand what they are and how they impact your revenue. It’s easy to see the deposits from Stripe hitting your bank account and assume that’s your total revenue, but that’s not the full picture. Stripe, like any payment processor, charges fees for its services. These fees are automatically deducted from each transaction, meaning the amount you receive is less than what your customer paid. Recognizing this difference is the first and most important step toward accurate financial reporting. Without a clear handle on these fees, you risk under-reporting your revenue and expenses, which can skew your financial statements and lead to poor business decisions. Let's break down exactly what these fees look like and how they work.
Stripe’s pricing is pretty straightforward, which is great, but you need to know what you’re looking at. For most businesses, Stripe uses a pay-as-you-go model. This means you won’t find any setup charges or monthly fees—you only pay for what you use. The standard fee for online credit card payments is 2.9% + 30¢ per successful transaction.
However, that base rate can change. If you need to manually key in a customer's card details, Stripe adds 0.5%. For payments from international cards, expect an additional 1.5% fee, and if a currency conversion is needed, that’s another 1% on top. While these might seem like small amounts, they add up quickly, especially for high-volume businesses. For larger companies, Stripe offers custom pricing plans, which can provide better rates based on your transaction volume. You can find all the details on their pricing page.
Here’s the part that often trips people up: Stripe deducts its fees before the money ever lands in your bank account. So, if a customer pays a $100 invoice, you won’t see a $100 deposit. Instead, you’ll see a deposit for the net amount after fees have been taken out. This is a critical detail for your bookkeeping.
Because the deposit amount doesn't match the sale amount, you can't just record the deposit as revenue. The correct way to handle this is to record the full invoice amount as gross revenue and then create a separate entry for the Stripe fee as a business expense. This method ensures your sales figures are accurate and your expenses are properly tracked. It gives you a much clearer picture of your financial health and where your money is going. For more accounting tips, you can find great insights on our blog.
Let’s walk through a quick example. Imagine you send a client an invoice for $1,000. They pay it through Stripe. Based on the standard fee, Stripe takes its cut ($29.30) and deposits the remaining $970.70 into your account. Your gross revenue for that sale is the full $1,000, not the $970.70 you received. The $29.30 is a cost of doing business—specifically, a payment processing expense.
Why does this matter so much? If you only record the net deposit as revenue, you're understating both your total sales and your total expenses. This skews your financial reports, making it difficult to gauge your company's actual performance. Accurately separating gross revenue from expenses is fundamental for everything from tax preparation to making strategic growth decisions. Automating this process with the right integrations can save you from these headaches entirely.
Getting your accounting system set up to handle Stripe payments correctly is one of the most important things you can do for your business. Think of it as building a strong foundation for your financial house. When everything is structured properly from the start, you avoid the frantic scramble that often comes with tax season or the need for an audit. More importantly, you gain a crystal-clear view of your company’s financial health, allowing you to make smarter, data-driven decisions about your growth.
Stripe is an incredible platform for accepting payments globally, but its fee structure can create some bookkeeping headaches if you’re not prepared. The key is to stop thinking about the money that lands in your bank account as your total revenue. Instead, you need a system that accounts for the gross sale, the fees Stripe deducts, and the final net deposit separately. This separation is fundamental to accurate financial reporting and compliance with standards like ASC 606. The good news is that setting this up is straightforward. By following a few key steps, you can create a clean, automated, and scalable accounting process that works seamlessly with Stripe, giving you peace of mind and more time to focus on your business.
First things first, you need a specific place in your books to track Stripe fees. Don't just lump them in with general bank fees or transaction costs. Create a dedicated expense account in your accounting software and name it something obvious, like "Stripe Processing Fees" or "Payment Gateway Fees." This simple step is a game-changer for clarity. It allows you to see exactly how much you're spending on payment processing at a glance, which is vital for analyzing your profitability and operational costs. By isolating these fees, you make financial reporting cleaner and your expense tracking much more precise. It’s a small organizational task that pays off big time.
To get a true picture of your sales performance, you must record the full, or "gross," amount of every sale in your books. This is the price the customer paid before Stripe took its cut. For example, if a customer pays $100, you should record $100 in a revenue account. The Stripe fee (say, $3) is then recorded separately in the dedicated expense account you just created. If you only record the $97 that hits your bank, you're understating both your revenue and your expenses. This practice is essential for proper revenue recognition and gives you accurate data for calculating key metrics like your gross margin.
Manually entering every Stripe transaction into your accounting software is not only tedious but also prone to human error. As your business grows, it quickly becomes unsustainable. The solution is to integrate Stripe directly with your accounting platform, like QuickBooks or Xero. Automation tools are designed to make this connection seamless. For instance, HubiFi provides robust integrations that automatically sync your sales, fees, refunds, and even disputes directly into your books. This saves you countless hours of manual data entry and ensures your financial records are always accurate and up-to-date, freeing you up to focus on strategic growth instead of tedious bookkeeping tasks.
Once you've integrated Stripe with your accounting software, the final setup step is to "map" your accounts. This simply means telling the system where to send the data. You’ll direct all sales revenue to your "Sales" or "Revenue" account and all processing fees to that "Stripe Processing Fees" expense account you created earlier. Proper mapping is what makes the automation work perfectly. It ensures every transaction is categorized correctly without any manual intervention. Remember, the amount Stripe shows you isn't what lands in your bank after fees. Correct mapping accounts for this difference automatically, giving you a flawless and reconciled financial picture. For more tips on managing your data, check out the HubiFi blog.
Recording Stripe fees accurately is less about complex accounting and more about having a consistent process. Once you have your accounting system set up, follow these steps for every transaction to maintain clean, audit-proof books. This routine will help you close your financials faster and make strategic decisions with confidence.
The key to accurate books is to account for the gross sale and the fee separately. Let’s say you invoice a customer for $1,000. When they pay with Stripe, you don’t receive the full amount. Instead, your bank account increases by the net amount (e.g., $970), while the Stripe fee (e.g., $30) is recorded as an expense. The full $1,000 is then marked as paid against the customer's outstanding balance.
To make this simple, create a dedicated expense account in your chart of accounts. Naming it something clear like “Stripe Processing Fees” keeps everything organized. This prevents you from lumping processing fees in with other bank fees, giving you a clearer picture of your transaction costs. Proper integrations with your accounting software can automate this categorization, saving you time and reducing manual errors.
Refunds and chargebacks are an inevitable part of doing business, and it’s important to know how they affect your books. When you issue a refund to a customer, Stripe typically does not return the original processing fee from the sale. This means you’re out the cost of that initial transaction. You’ll need to record the refunded amount as a debit from your sales revenue and recognize the non-refundable fee as a business expense.
The good news is that payment processing fees are generally considered necessary business expenses. This means they are often tax-deductible, which can help soften the blow. Just be sure to account for them correctly as an expense, not as a reduction of gross revenue.
If your business sells to international customers, you’ll need to account for currency conversion fees. When a customer pays in a different currency, Stripe applies an additional fee on top of its standard processing rate. According to Stripe’s pricing, this is usually an extra 1% for currency conversion, though this can vary.
This extra fee can eat into your profit margins if you don’t track it carefully. When you record the transaction, make sure you account for both the standard processing fee and the currency conversion fee. Separating these costs helps you analyze the true profitability of your international sales and adjust your pricing strategy if needed.
Meticulous record-keeping is your best defense during an audit and a cornerstone of sound financial management. Always save invoices, receipts, and any statements that detail the fees you’ve paid. Stripe makes this easy by providing monthly statements that you can download for your records. This documentation serves as crucial proof of your expenses if tax authorities ever have questions.
While manual record-keeping works, it can become overwhelming as your business grows. Automating your financial data flows ensures that all documentation is captured and stored correctly without manual intervention. If you find yourself spending hours on this, it might be time to schedule a demo to see how an automated solution can handle it for you.
Daily reconciliation might sound like a chore, but it's one of the most powerful habits you can build for your business's financial health. Think of it as your daily financial check-up. It’s the process of making sure the money you recorded in your books matches what actually landed in your bank account from Stripe. Doing this consistently keeps your records clean, helps you spot errors before they become massive headaches, and gives you a true, up-to-the-minute picture of your cash flow. Without it, you're flying blind, making decisions based on incomplete data.
The core challenge with Stripe reconciliation is that payouts don't arrive as clean, single transactions. A single bank deposit from Stripe often bundles multiple customer payments and has fees already deducted. This means the amount deposited will rarely match a single sales invoice. Your task is to untangle these bundled payouts, correctly account for the gross sales, and properly categorize the Stripe fees as a business expense. Regularly matching your Stripe transactions with your bank statements helps you find any errors quickly. This isn't just about being organized; it's about ensuring every dollar is accounted for, which is critical for accurate revenue recognition and tax preparation. For businesses with high transaction volumes, this manual process can become overwhelming, which is why many turn to automated integrations to streamline the entire workflow.
The first step in reconciliation is to pull up your bank statement alongside your Stripe payout report. Your goal is to connect the lump-sum deposit from Stripe to the individual sales that make it up. Remember, the money Stripe deposits into your bank account will often be less than the total sales because fees were taken out. Also, one deposit might include many customer payments. You'll need to use your Stripe dashboard to see a detailed breakdown of which sales and fees are included in each payout. This process confirms that your recorded revenue is accurate and that you're not missing any transactions or overstating your income.
It's completely normal to find discrepancies during reconciliation, and the culprit is almost always the fees. If you're using accounting software like QuickBooks, head to the 'For Review' tab. The software will try to match transactions automatically, but for payments that don't match perfectly, you can use the 'Find match' feature. If there's a difference because of fees, use the 'Resolve Difference' option and put the fee amount into your 'Stripe Processing Fees' expense account. This correctly records the fee as a cost of doing business. Most accounting platforms offer similar functionality to help you resolve these minor differences and keep your books balanced.
Once you've matched your transactions and accounted for discrepancies, the final step is to verify that everything balances to zero. This means your recorded Stripe sales, minus the fees, should perfectly match the deposit in your bank account. Achieving this balance confirms the accuracy of your work. Making this a regular habit builds immense confidence in your financial data. It’s not just about having tidy books; it’s about creating a reliable source of truth for making strategic business decisions, from budgeting to forecasting. You can find more tips for maintaining accurate financial records on our blog.
The most effective way to manage reconciliation is to prevent errors from happening in the first place. The golden rule is to always remember the fees. Stripe takes its cut before the money hits your bank, so the amount you see in your Stripe account isn't the final amount you'll get. For businesses with a high volume of transactions, manually tracking every fee and sale is not only time-consuming but also highly susceptible to human error. This is where automation becomes essential. An automated revenue recognition solution can handle this complexity for you, ensuring your financials are always accurate, compliant, and audit-ready. If you're ready to stop wrestling with spreadsheets, you can schedule a demo to see how automation can transform your financial operations.
As your business grows, your transactions naturally become more complex. You might start selling internationally, launch a subscription service, or process a high volume of orders daily. While exciting, this growth introduces new types of fees that can complicate your accounting if you’re not prepared. Managing these scenarios correctly is key to maintaining clear financial visibility and making smart decisions. It’s all about breaking down each transaction into its core components: the gross sale and the specific fees attached. Let’s walk through how to handle the most common complex situations.
When your business is processing a large number of payments, things can get messy fast. It might seem easier to just record the net deposit that hits your bank account, but this approach hides the true cost of your payment processing. When you receive payments through Stripe, especially in high volumes, it's crucial to record the gross sales and track the fees as separate expenses. This ensures that your financial records accurately reflect your total revenue and your operational costs. Manually tracking this for hundreds or thousands of transactions is nearly impossible, which is why automating your accounting is essential for scaling businesses. It keeps your books clean and gives you a precise understanding of your profit margins.
Expanding your business to a global audience is a major milestone, but it comes with a different fee structure. For international transactions, Stripe applies additional fees, which can include a percentage for currency conversion and a cross-border transaction fee. You can find the exact details on Stripe’s pricing and fees page. To maintain accurate financial records, you must account for these fees separately from standard processing fees. This allows you to analyze the true profitability of each market you sell in. By isolating these costs, you can make informed strategic decisions about where to focus your international marketing efforts and whether your pricing is appropriate for each region.
Subscription models are fantastic for generating predictable revenue, but they require careful accounting. When managing subscription services, you need to record the full amount of the subscription as income and separately track any fees associated with processing these recurring payments. This practice is fundamental for maintaining clarity in your financial statements and is a cornerstone of proper revenue recognition. It gives you a clear view of your Monthly Recurring Revenue (MRR) and Customer Lifetime Value (CLV) without processing fees skewing the numbers. This level of detail is non-negotiable for understanding the financial health and long-term viability of your subscription business.
Your payment system is likely more than just Stripe. You might be using it with an ecommerce platform like Shopify, a CRM, or other third-party applications that help run your business. If you are using Stripe in conjunction with other platforms, be sure to record any associated fees as separate expenses. These platform or app fees are part of your total transaction costs, and lumping them in with Stripe’s fees can muddy your financial analysis. By itemizing these expenses, you get a complete picture of your tech stack's total cost. This is where seamless integrations with HubiFi become invaluable, as they can automatically pull in data from different sources to give you a unified view of your expenses.
Dealing with taxes can feel like a chore, but when it comes to Stripe fees, there’s a silver lining. Those fees you pay on every transaction aren't just a business cost—they're a key part of your financial picture with important tax implications. Understanding how to handle them correctly can directly impact your bottom line by reducing your taxable income. Think of it this way: every dollar you correctly account for as a fee is a dollar you don't pay taxes on.
The key is to treat these fees with the same attention you give your revenue. This means knowing which fees you can write off, keeping meticulous records, and understanding how to report everything correctly when tax season rolls around. It’s not just about compliance; it’s about smart financial management. For businesses operating across borders, there’s an added layer of complexity with international tax rules. Getting this right from the start saves you from future headaches with tax authorities and ensures your financial statements are accurate and audit-proof. With a clear process, you can turn this aspect of your accounting from a potential problem into a strategic advantage.
Here’s the good news: Stripe’s payment processing fees are almost always tax-deductible. They fall under the category of necessary business expenses, which means you can subtract them from your gross income to lower the amount of profit you’re taxed on. According to Stripe, "Payment processing fees are generally considered necessary business expenses and can be deducted from your taxes in many places, including the United States." This applies to the standard transaction fees, but also to other charges like fees for disputes or recurring billing services. By accurately tracking and deducting these costs, you ensure you’re not overpaying on your taxes and are keeping more of your hard-earned revenue.
If you ever face a question from tax authorities, your best defense is solid documentation. That’s why it’s essential to keep detailed records of all the fees you pay to Stripe. As Stripe’s own resources advise, "Always save invoices, receipts, and statements that show the fees you paid." You can download monthly reports and transaction histories directly from your Stripe Dashboard. Store these documents digitally in an organized folder so you can easily access them when it's time to file your taxes or if you need to verify your numbers. Having this proof on hand makes tax time smoother and gives you peace of mind. For more tips on financial best practices, you can find helpful articles on the HubiFi blog.
If your business sells to customers around the world, you’ll need to pay attention to international tax laws. The rules for how fees are taxed can vary significantly from one country to another. For example, in some regions, you may have to account for Value Added Tax (VAT) or Goods and Services Tax (GST) on the fees themselves. Stripe helps with this by providing monthly tax invoices in certain countries, which you can use for your local tax reporting. You can export these fee reports from your dashboard. Because these regulations can be complex, it’s always a good idea to consult with a tax professional who has experience with international commerce to ensure you’re fully compliant.
When it’s time to file your taxes, you need to know exactly where to report your Stripe fees. For sole proprietors in the US, these expenses are typically reported on Schedule C (Form 1040), often under the "bank fees" or "commissions and fees" category. For corporations filing Form 1120, these fees are listed as an operating expense. Having your fees properly categorized in your accounting system throughout the year makes this final step much easier. An automated revenue recognition system ensures all this data is organized and ready for reporting, eliminating last-minute scrambles. If you want to see how automation can simplify your financial close, you can schedule a demo with HubiFi to learn more.
Manually tracking every Stripe fee is a time-consuming task that only gets more complicated as your business grows. A single missed decimal point or miscategorized transaction can throw off your books for the entire month. The good news is that you don't have to manage it all by hand. By setting up a more streamlined system, you can save hours of work, reduce errors, and get a much clearer picture of your financial health. It’s all about working smarter, not harder, to keep your records clean and your business moving forward.
If you’re still tracking Stripe fees in a spreadsheet, you know how quickly it can become overwhelming. Manual data entry is not only slow but also leaves a lot of room for human error. Automating your fee tracking solves this by syncing your sales data directly with your accounting software. This ensures that every transaction, fee, and payout is recorded correctly without you having to lift a finger. Properly recording Stripe deposits and regularly reconciling your bank account will ensure your books are accurate and ready for tax filings or audits. Automation gives you back valuable time and provides financial data you can actually trust.
For businesses with a high volume of sales, real-time tracking is essential. Tools that automatically connect Stripe with your accounting software can import transactions and separate sales revenue from fees for you, which saves time and prevents mistakes. Instead of waiting until the end of the month to see where you stand, you get a live view of your cash flow. This allows you to make faster, more informed decisions based on up-to-the-minute data. Look for solutions that offer seamless integrations with the platforms you already use to create a truly connected financial ecosystem for your business.
Even with the best automation in place, it’s still a good idea to perform regular checks to ensure everything is running smoothly. Think of it as a quick spot-check rather than a deep-dive investigation. Regularly matching your Stripe transactions with your bank statements helps you find any discrepancies quickly. An automated system makes this process much easier by flagging potential issues for you. Taking a few minutes each week to verify your data is accurate will give you peace of mind and prevent small errors from turning into major problems down the road. You can find more helpful tips on maintaining financial health in our other insights.
No one likes thinking about audits, but being prepared is the best strategy. Clean, organized, and accurate financial records are your best friend during an audit process. Since payment processing fees are generally considered necessary business expenses, you can often deduct them from your taxes. To do this confidently, you need a clear and detailed record of every fee you’ve paid. An automated system creates an easy-to-follow audit trail, providing the documentation you need to justify your deductions. This level of organization shows auditors that your financials are well-managed and transparent.
Managing Stripe fees doesn't have to be a manual headache. With the right tools, you can streamline the entire process, from tracking individual fees to preparing for tax season. Here are a few resources that can make your accounting life much easier.
Your first stop for tracking fees should be Stripe itself. Stripe offers built-in reporting features that provide a clear breakdown of your transaction costs. You can download a "balance summary report" as a CSV file, which includes a dedicated column detailing the fees for each transaction. This is a straightforward way to export the fee data you need without any extra software. While it’s a great starting point for businesses with lower transaction volumes, you might find you need a more automated solution to keep up as your company grows and the number of payments increases.
For businesses handling a large number of transactions, manually downloading CSVs isn't sustainable. This is where third-party tools come in. By connecting Stripe to your accounting software, you can automate the entire process of importing transactions and separating sales revenue from fees. This not only saves a significant amount of time but also dramatically reduces the risk of human error in your books. At HubiFi, we specialize in creating these kinds of seamless integrations that give you a reliable, single source of truth for your financial data, so you can close your books faster and with more confidence.
Once your data is flowing into your accounting software, you can use its reporting features to get a deeper understanding of your Stripe fees. In a platform like QuickBooks, you can run a "Profit & Loss" report to see your total fee expenses over a period or a "Transaction Detail Report" for a line-by-line view. Customizing these reports helps you analyze your spending and see the true cost of payment processing. These financial insights are crucial for making informed decisions about your pricing, promotions, and overall business strategy, turning raw data into actionable intelligence.
Don't overlook the documents Stripe provides directly. In some regions, Stripe generates monthly invoices that summarize all the fees you’ve incurred. These are incredibly useful for your records and serve as official documentation for tax purposes. Think of them as a ready-made resource for keeping your fee tracking organized and ensuring you have what you need when it’s time to file. Making a habit of downloading these tax invoices for Stripe fees each month can save you a lot of stress and help you stay compliant.
Why can't I just record the money Stripe deposits into my bank as my total sales? This is a common mistake, but it gives you a skewed picture of your company's financial health. The amount Stripe deposits is your net revenue, which is your total sales after fees have been taken out. By only recording the deposit, you are understating both your gross revenue and your business expenses. The correct method is to record the full sale amount as revenue and the Stripe fee as a separate business expense. This gives you an accurate view of your performance and helps you make much smarter strategic decisions.
What's the first thing I should do in my accounting software to handle Stripe fees correctly? The most important first step is to create a dedicated expense account in your chart of accounts just for these fees. Don't lump them in with general bank charges. Naming it something clear and specific, like "Payment Processing Fees" or "Stripe Fees," will make your financial reporting much cleaner. This simple organizational step allows you to see exactly how much you're spending on payment processing at a glance, which is vital for analyzing your profitability.
My bank deposit from Stripe is a lump sum that doesn't match any of my individual sales. How do I reconcile this? This happens because Stripe often bundles multiple customer payments into a single deposit, with all the fees already deducted. To sort this out, you'll need to use the payout report in your Stripe dashboard. This report breaks down exactly which sales and fees are included in that lump-sum deposit. You can then match those individual transactions in your accounting software to the deposit, accounting for the fee difference as an expense.
What happens with the processing fee when I have to issue a refund? When you refund a customer, Stripe typically does not return the original processing fee from that transaction. This means the fee becomes a business cost that you absorb. In your books, you should record the refund as a reduction of your sales revenue, while ensuring the non-refundable fee is still categorized as a business expense. This is an important detail for keeping your financial records accurate.
Is it really worth the effort to track every single fee, especially if I have a lot of transactions? Yes, it's absolutely worth it. Tracking each fee is the only way to get a true measure of your profitability and ensure you can claim these costs as a tax deduction, which ultimately lowers your taxable income. While it sounds like a lot of manual work, this is precisely where automation becomes a game-changer. Integrating Stripe with your accounting system can handle this tracking for you automatically, saving you countless hours and preventing costly errors.
Former Root, EVP of Finance/Data at multiple FinTech startups
Jason Kyle Berwanger: An accomplished two-time entrepreneur, polyglot in finance, data & tech with 15 years of expertise. Builder, practitioner, leader—pioneering multiple ERP implementations and data solutions. Catalyst behind a 6% gross margin improvement with a sub-90-day IPO at Root insurance, powered by his vision & platform. Having held virtually every role from accountant to finance systems to finance exec, he brings a rare and noteworthy perspective in rethinking the finance tooling landscape.
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