How is GST calculated on merchant fees?

Recovering merchant fees on top of entry fees is an optional feature in Award Force. If enabled, you choose the surcharge recovery percentage based on your payment gateway costs and the terms of your agreement with the provider.

Merchant fees are credit card processing fees, which are different from general bank fees. In Australia, GST is charged on credit card merchant fees, meaning you may be able to claim a GST credit on those costs.

Because of this, during checkout the calculation works in the following order:

1. The merchant fee is calculated first
2. GST is then applied to the merchant fee amount

This ensures the GST component is calculated correctly and reported accurately. This approach has been researched and validated to align with standard GST treatment of merchant fees.

For step-by-step configuration details, see: Payment configuration.

Good to know

• The merchant fee recovery percentage is entirely configurable and should reflect your actual gateway costs.
• GST is applied after the merchant fee is calculated, not before.
• Award Force treats merchant fees differently from bank fees because their tax treatment differs.
• Always confirm GST handling with your finance or tax advisor to ensure it meets your organisation’s obligations.