How do I pass online payment fees on to customers in Zoho Books?
Zoho Books does not offer a general automatic surcharge for every payment gateway. The common approach is to add a separate convenience fee line or item to invoices that will be paid online, or to adjust prices. Before charging card fees, check the law where your customers are, because surcharging is restricted or banned in some places and card networks have their own rules.
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Gateways such as Stripe, PayPal or Razorpay charge you a fee per transaction. Zoho Books records the payment and lets you record the gateway charge as a bank charge when you reconcile, so your books stay accurate. What it does not do for most gateways is add a percentage to the customer's total automatically when they choose to pay online.
The practical workaround is a non-inventory item called something like Online payment fee. Add it to invoices for customers who pay by card, either manually or through an invoice template or a custom function that adds the line when a certain payment option is offered. Some businesses instead offer a small discount for bank transfer, which has the same effect and is legal in more places.
Rules differ widely. Many US states allow card surcharges within limits and with disclosure, while the UK and EU ban surcharges on most consumer card payments. India has its own guidance for merchants. Check with your accountant, and check the current Zoho Books help pages, because gateway features change and some regions get new payment options over time.
Key points
- Confirm surcharging is allowed for your customers' location and card type.
- Create a non-inventory item for the online payment fee.
- Add the fee line to invoices that will be paid online, or automate it with a custom function.
- Record gateway charges as bank charges when you reconcile.
- State the fee clearly on the invoice and in your terms.
Common questions
Can I offer a discount for bank transfer instead?
Yes. An early or bank transfer discount line is a common and widely accepted alternative to a card surcharge.
Will the fee affect sales tax?
It may. In some places a fee on a taxable sale is itself taxable, so set the tax on the fee item with your accountant's advice.
Sources and further reading
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Written by Flowpeak, a Zoho implementation partner. Zoho pricing and features change, so confirm current details on the official Zoho site. Free checklists | Ask us a question