Getting paid net of fees means that someone deducted fees from the amount a customer has paid you, before you receive the income.

An example of a website charging fees such in this way is Etsy. When selling on Etsy you'll see that they deduct a payment fee, a transaction fee and VAT processing fees from the amount the customer paid. This means that you only receive around 90% of the total sale value.

This also happens if you use an agent to rent out your property. They might charge a 15% fee and send the remaining 85% of the rent to you as a landlord.

When it comes to your tax return, you should include the total sale or rental value as income and fees as expenses.

The simplest way to account for those missing fees is to add 2 manual transactions. An income transaction for the missing income, and an expense for the expenses.

To make this adjustment:

  • request or download a statement from website or company charging any fees

  • add up the total fees charged for the year

  • add 2 manual transactions for that value, one income and one expense, at the end of the tax year

Adding these transactions ensure your income and expenses totals are accurate. They will cancel each other out, so your profit will be the same.

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