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Record marketplace fees as a business expense, separate from your sales, and book the full sale price as revenue. The platform’s cut isn’t a reduction of what you sold for. It’s a cost of selling, and on the CRA’s self-employment guide it sits with other expenses like advertising, delivery and interest and bank charges.
That sounds obvious, but it’s the place many online sellers go wrong. They record the payout the platform sends, which is sales minus fees minus refunds, and lose sight of each piece. The books then show lower sales than your customers actually paid.
How should you record marketplace fees in your books?
Use three lines for each sale. Gross sales go in revenue at the price the customer paid. Fees go in an expense account, or several if the platform splits them (a selling fee, a payment fee, an ad charge). The payout is what hits the bank, and your bookkeeping should reconcile to it.
Most platforms publish a monthly statement that lists sales, fees, refunds and adjustments. Download it each month. We didn’t look at any specific platform’s fee schedule, and we make no claim about what any of them charges, so use the figures on your own statements.
A quick check each month: sales minus fees minus refunds should equal the deposit. If it doesn’t, find out why now. Finding a gap twelve months on is miserable.
Which fees can you deduct?
The CRA’s Guide T4002 lists deductible expenses by type. Advertising, delivery and freight, interest and bank charges, professional fees, and office expenses are all there. Platform fees for selling, payment processing, shipping labels and promoted listings fit those headings. We read the guide’s list of categories rather than a rule that names marketplaces, so file each fee under the heading that fits best.
| Type of charge | Where it usually fits in T4002 |
|---|---|
| Promoted listings and ads | Advertising |
| Shipping labels and courier costs | Delivery and freight |
| Payment processing and bank charges | Interest and bank charges |
| Bookkeeper or accountant | Professional fees |
| Meals with a supplier | Meals and entertainment, at 50% |
Not everything is deductible. The guide says you can’t deduct the value of your own labour, personal expenses, or the purchase of capital property, which goes through capital cost allowance instead.
What happens with GST/HST on platform sales?
Your registration status decides who collects. The CRA says a distribution platform operator must collect GST/HST on qualifying goods sold by vendors who aren’t registered, based on the final sale price. If you’re registered under the normal regime, you charge and collect it yourself on your own sales, even when they go through a platform.
If you’re registered and pay GST/HST on a fee, you may be able to claim it back. Check the platform’s invoice and the CRA’s ITC rules. The T4002 guide adds one rule: reduce your expense amounts by any input tax credits you claim, so you don’t deduct the same tax twice.
Not sure what a sale total holds once tax is in it? The reverse HST calculator strips the tax out, and the GST/HST calculator adds it on.
How much do the fees actually cost you?
Take a product that sells for $60. It cost you $24, shipping is $6, and suppose the platform takes 13% ($7.80). That 13% is an example, not any platform’s rate. Your all-in cost is $37.80. The profit margin calculator shows $22.20 of profit per item, a 37.0% margin and a 58.7% markup.
Push the fee to 20% ($12) and the same sale leaves $18 of profit, which is a 30% margin. Try your own numbers before you price a new listing, or work out the return on a paid ad with the ROI calculator.
And the tax side? Fees lower your net income. On $80,000 of net business income in Ontario, our self-employed tax calculator shows $22,126 of income tax plus CPP. At $70,000 it’s $18,298, so $10,000 of extra deductible fees cuts that total by $3,828. That tool leaves out GST/HST and EI, so it’s an estimate of one part of the bill.
What mistakes cost sellers money?
Netting fees against sales is the big one, because it understates revenue. That can matter for GST/HST if you’re close to the registration limit. The CRA describes small suppliers as those with $30,000 or less of worldwide taxable revenue in a single quarter and over the last four quarters, but we read that from a search summary, so check the CRA’s own page before relying on it.
Next, forgetting refunds. A refunded order can mean you’ve paid a fee and got nothing for it. Some platforms return part of the fee and some don’t, so read the statement line by line.
Last, don’t assume a fee rate stays put. Platforms change terms, and you’d only learn from your statements. We didn’t confirm any fee or fee change here, so this page stays neutral on purpose.
Where do these rules come from?
Deductible expense categories and the rule about input tax credits come from the CRA’s Guide T4002, Chapter 3. The distribution platform rules come from the CRA’s GST/HST for digital-economy businesses pages. The $60 sale and 13% fee are examples we chose.
Frequently asked questions
Are marketplace fees tax deductible in Canada?
Selling costs like advertising, delivery, and bank charges are on the CRA's list of deductible expenses in Guide T4002. File each fee under the heading that fits.
Should I record the payout or the full sale?
Record the full sale as revenue and the fees as expenses. The payout is just the bank deposit you reconcile to.
Who charges GST/HST on marketplace sales?
The CRA says a distribution platform operator collects it for unregistered vendors on qualifying goods. Registered vendors collect their own.
Can I claim GST/HST I paid on fees?
If you're registered, you may be able to claim input tax credits. Check the platform's invoice and the CRA's rules, and reduce the expense by any credit claimed.
What do platforms charge?
We didn't confirm any platform's fees. Use the figures on your own seller statements.
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Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.