PayPal processes transactions that represent credits and debits, which increase or decrease the PayPal bank balance.
PayPal organizes these transactions into categories.
This article provides examples of transactions in the Fees category and guides you in selecting the appropriate general ledger account and tax rate in your connected accounting ledger.
The Fees category includes any amount charged by PayPal as a fee.
Choosing the general ledger account
Your PayPal Fees will need to be mapped to a GL account. You can either:
Use A2X's Auto Setup and allow A2X to create this account, or
Choose your own account from your connected accounting ledger.
If you use A2X Auto Setup, A2X will create an account called PayPal Fees in the connected ledger. The account type created by the auto-setup account is an 'expense' account.
Choosing the tax rate
You will need to select a tax rate for your PayPal Fees transactions. The appropriate tax rate will depend on whether or not your business is registered for, and entitled to a sales input tax credit for fees. We recommend you check with your accountant or relevant tax authority to determine if sales tax is charged on PayPal Fees.
A2X will generate a separate row for each fee transaction type within your business statement history. The fee may be a (DR) which is a decrease to the bank account, or a (CR) which is an increase to the bank account (i.e. for a fee refund).
The most common fee row within PayPal will be a Payment Fee. This is the percentage and fixed amount-based fee that PayPal charges for processing most transactions.
There are many other fee types including Chargeback fees, Fee refunds, and Service fees.