In this example, a customer payment is made using American Express (AMEX) and includes merchant fees that are taxable. The sale of $220.00 was charged $11.00 in AMEX merchant fees (inclusive of GST). Your bank statement then shows the AMEX payment less the merchant fee.

1. Create an asset account to temporarily hold the funds collected and paid.
   Here's our example:
   
2. Create an invoice for the sale and enter the full amount, including any fees.
   Here's our example:
   
3. Record the payment and select the option Group with Undeposited Funds and select the applicable Payment Method.
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4. Go to Banking > Prepare Bank Deposit and click Deposit Adjustment.
   
5. In the Fees and Cash Back section, enter the merchant fee in the Amount field and select the Amex Clearing Account in the Expense Account field.
   Here's our example:
   
6. Click Record. A new transaction line representing the merchant fee will appear in the Prepare Bank Deposit window.
7. Select the transactions and the fees that make up the total value of the deposit to your bank account, then click Record.
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The Bank Register window now shows a single transaction representing what was actually received into your bank account.
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Clicking the transaction's zoom arrow displays the breakdown of the transaction, consisting of the payment received and the deducted merchant fee:

At the end of these transactions:

• the sale is closed
• the merchant fee expense is recorded, and
• the clearing account is back to a zero balance.

In this example, a customer payment is made using American Express which includes taxable merchant fees. The sale totals $220.00 which includes $11.00 in merchant fees (inclusive of GST). Your bank statement shows the full AMEX payment including the merchant fee, and also shows the merchant fee being deducted as a separate entry.

1. Create an invoice for the full amount of the sale.
   Here's our example:
   
   
2. Record the payment against the open invoice.
   Here's our example:
   
   
3. Record a Spend Money transaction for the merchant fee.
   Here's our example where we've allocated the expense to a merchant fees expense account: