Can you claim bank fees and payment processing fees as a freelancer? Account fees, card and payment service fees, fees taken from payouts and where they go under the IRS, HMRC and CRA rules (US, UK, Canada)

A monthly account fee, a charge for each transfer, and a cut of every card or online payment a client makes through a service such as Stripe or PayPal: small fees add up over a year. Here's what the IRS, HMRC and the CRA say about claiming them, what none of them say about payment services by name, where the fees go on each return, how to record a fee that was taken before the money reached you, and what to keep.

General information, not tax, legal or accounting advice. Not written or reviewed by a lawyer or an accountant. The short answer, the side-by-side summary, the steps, the checklist, the wording to copy and all the other wording are ours; the official items come from the US, UK and Canadian government pages linked below. This page is about a self-employed person (a sole proprietor or sole trader) paying bank account fees and card or payment service fees. It doesn't tell you whether a particular fee counts, what share of a fee is business, or which line or box applies to you, and it doesn't cover interest, loans or overdraft borrowing, leasing or hire purchase, charging clients a fee for paying by card, refunds and chargebacks, exchange gains and losses, employees, companies, VAT, GST/HST or sales tax on fees, US states, Canadian provinces, Quebec, or other countries. Rules change; check the current official pages before you claim. Official pages were read on 2026-10-20.

The short answer

1. US: the small business publication's list of other expenses opens "You may also be able to deduct the following expenses." and includes "Bank fees." For card and payment app payments, the IRS page on the payment form says "These items are not taxable income. You can deduct them from the gross amount. Check your records." about fees and the other items it lists; see sections one and two.
2. UK: GOV.UK lists "bank, overdraft and credit card charges" among the financial costs you can claim, and the return notes put them in the bank, credit card and other financial charges box; see sections three and four.
3. Canada: the CRA's management and administration fees line says "You can deduct management and administration fees, including bank charges, incurred to operate your business." "Bank charges include those for processing payments."
4. Stripe, PayPal and the rest? None of the official pages we read name a payment service. Our reading is that a fee a payment service charges you for taking a client's payment is a bank or payment charge in all three countries; see "Where the sources differ".
5. Fee taken before payout? Our reading is to record the full amount the client paid as income and the fee as a separate expense, so your records match the service's reports; see section two and the steps.

On this page

• 1. United States: bank fees
• 2. United States: card and payment app fees
• 3. United Kingdom: bank, credit card and other financial charges
• 4. United Kingdom: the return notes
• 5. Canada: bank charges and processing fees
• 6. Canada: the interest and bank charges line
• 7. Side by side
• 8. Step by step
• 9. Wording to copy
• 10. Checklist
• Free tools and kits
• Where the sources differ
• When to get advice
• Related
• Sources

1. United States: bank fees

• The general rule: "To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business."
• Other Expenses You Can Deduct: "You may also be able to deduct the following expenses." The list includes "Bank fees." with no more detail (IRS: Publication 334 (2025), Tax Guide for Small Business, page date 30-Apr-2026).
• Private use: "If you have an expense that is partly for business and partly personal, separate the personal part from the business part." "The personal part is generally not deductible."
• Where it goes: the instructions don't name a line for bank or payment fees. Under Line 10 they say "Enter the total commissions and fees for the tax year. Do not include commissions or fees that are capitalized or deducted elsewhere on your return." Under Part V. Other Expenses. Line 48 they say "Include all ordinary and necessary business expenses not deducted elsewhere on Schedule C. List the type and amount of each expense separately in the space provided." (IRS: Instructions for Schedule C (Form 1040) (2025), page date 30-Apr-2026).

Our reading: the instructions leave the choice open, so pick one place, use it each year and keep a note of what's in it. For the schedule itself, see the expense categories in our Schedule C guide.

2. United States: card and payment app fees

• Gross payment amount (Box 1a): "The gross payment amount shows the total value of payments you received through payment card and third party network transactions." "The gross payment amount isn't adjusted for any:"
  • Fees
  • Credits
  • Refunds
  • Shipping
  • Cash equivalents
  • Discounts
  "These items are not taxable income. You can deduct them from the gross amount. Check your records."
• Your records: "Your records may include reports from payment apps or online marketplaces, payment card receipts or merchant statements. Use the records to:" The list includes "Check for expenses you can deduct from the gross amount (fees, credits, refunds, shipping, cash equivalents or discounts)." (IRS: What to do with Form 1099-K, page date 27-Jul-2026).

Our reading: the same applies to fees on card and app payments whether or not you get the form, so keep the service's fee reports with your statements. What the form is, when you get one and how to match it to your invoices are in our Form 1099-K guide.

3. United Kingdom: bank, credit card and other financial charges

• Running costs: "If you’re self-employed, you can only claim for costs related to business purchases, including:" The list includes "financial costs, for example insurance or bank charges"
• Business and personal use: "You can only claim allowable expenses for the business costs." (GOV.UK: Expenses if you're self-employed, page date 2024-11-08).
• Bank, credit card and other financial charges: "You can claim for business costs such as:"
  • bank, overdraft and credit card charges
  • interest on bank and business loans
  • hire purchase interest
  • leasing payments
  • alternative finance payments, for example Islamic finance
  "You cannot claim for repayments of loans, overdrafts or finance arrangements." "If you’re not sure whether a business cost is an allowable expense contact HMRC." (GOV.UK: Expenses if you're self-employed, legal and financial costs, page date 2024-11-08).

Our reading: the list also covers interest and finance payments, which this page doesn't go into; keep interest and repayments apart from fees in your records.

4. United Kingdom: the return notes

• On the return: the notes for the full self-employment pages say, under Box 26 Bank, credit card and other financial charges, "This includes any bank, overdraft and credit card charges, hire purchase and lease interest, and alternative finance payments. Do not include capital repayments." "If you used any part of your loan, overdraft or finance payment for non-business use, put the non-business part of the costs in box 41." (HMRC: Self-employment (full) notes, Tax year 6 April 2025 to 5 April 2026 (2025–26), PDF).

If you use the short pages or give one total for expenses, the boxes are different; our UK Self Assessment guide shows the expense boxes on both versions.

5. Canada: bank charges and processing fees

• The general rule: "Generally, you can deduct any reasonable current expense you incur to earn business income." "However, since you cannot deduct personal expenses, enter only the business part of expenses on the Form T2125, Statement of Business or Professional Activities." (CRA: Expenses section of Form T2125, page date 2026-08-31).
• Bank charges: "You can deduct management and administration fees, including bank charges, incurred to operate your business." "Bank charges include those for processing payments." (CRA: Line 8871 – Management and administration fees, page date 2026-08-31).
• In the guide: under the same line, the guide says "You can deduct management and administration fees including bank charges incurred to run your business." (CRA: Guide Self-employed Business, Professional, Commission, Farming, and Fishing Income: Chapter 3 – Expenses, page date 2026-04-16).

The expense lines sit in the expenses part of your statement of business or professional activities: see our guide for Canadian freelancers.

6. Canada: the interest and bank charges line

• Line 8710 – Interest and bank charges: the page for this line opens "You can deduct interest on money borrowed for business purposes or to acquire property for business purposes." The rest of it is about interest and fees for loans (CRA: Line 8710 – Interest and bank charges, page date 2026-08-31).

Our reading: the CRA's own pages put everyday bank charges and payment processing charges on the management and administration fees line, even though the interest line also has bank charges in its name; see "Where the sources differ".

7. Side by side

Our summary of sections one to six, not official wording.

8. Step by step

Our order of steps, based on sections one to six — not an official checklist.

1. Download the statements for each business bank account, card and payment service for the tax year.
2. List every fee: monthly account fees, transfer and payment fees, card processing fees, payout fees and any other charges.
3. Where a payment service took its fee before paying you, record the full amount the client paid as income and the fee as a separate expense, so your totals match the service’s reports.
4. Check that a refund, a chargeback or an exchange rate difference isn’t mixed in with the fees; those follow their own rules.
5. If an account or card is also used for personal things, count only the fees that relate to the business, with a reasonable method you can explain.
6. Keep interest and loan repayments apart from fees; they are treated differently.
7. Check which line or box your tax office uses for bank and payment fees, and use the same one from year to year.
8. Keep the statements, fee reports and any yearly fee summaries.
9. Ask the tax office or an adviser if you’re unsure, especially about loans, foreign currency, or an account shared with personal spending.

9. Wording to copy

Fill in everything in [brackets]. This is ours, not from any agency, and it's not tax, legal or accounting advice. It doesn't take the place of the statements and records your tax office may ask for.

A monthly record of bank and payment fees for your files

Bank and payment fees record (my own records, not an official document)
Tax year: [year or period]
Account or service: [bank account / card / payment service name]
Used for: [business only / business and personal, business part worked out as: method]
Month: [month]
Paid by clients through this service: [amount]
Fees taken before payout: [amount]
Paid out to my bank: [amount]
Other fees charged: [monthly fee / transfer fee / other], [amount]
Refunds, chargebacks or exchange differences (kept apart): [none / amount and note]
Line or box used: [line or box]
Statement or report kept at: [where]

A request to your bank or payment service for a fee summary

Hi [bank or payment service],

Could you send a summary of all fees charged on my account [account name or reference] for [period], showing each type of fee separately from refunds and payouts?

[If a yearly fee or tax summary is available as a download, could you tell me where to find it?]

That way my records match my statements. Thanks,
[your name]

10. Checklist

Our summary of the official pages above, not an official checklist.

• Statements for every business account, card and payment service for the year
• Every fee listed, with the date and the service that charged it
• Fees taken before payout recorded separately from the income
• Refunds, chargebacks and exchange differences kept apart from fees
• Fees on an account you also use privately split, with a note of how
• Interest and loan repayments kept apart from fees
• The line or box you used on your return
• Statements and fee reports kept
• Anything you’re not sure about, checked with the tax office or an adviser

Free tools and kits

• Our free expense tracking guide shows a simple way to keep business cost records.
• Our free expense and receipt log keeps the details for each payment.
• Our paid Freelance Billing Kit by Small Rows (US$12, one-time) can log each fee: the Expenses tab has a date, a category, a description, the amount paid and a "Deductible? (your call)" column, and the category drop-down lets you pick Bank & payment fees from the kit's own list, the commissions and fees line or the other expenses line from the US list, or the bank, credit card and other financial charges box from the UK list, or type your own. Each row counts in full in the year of its date; to count only the business part of the fees on an account you also use privately, enter a row marked Yes and a row marked No. It doesn't connect to your bank or payment service, read statements, split fees out of payouts, decide what counts, pick the line or box for you or file anything.
• All three kits together: the All-Kits Bundle by Small Rows (US$24, one-time).

Where the sources differ

• Payment services aren't named: none of the IRS, GOV.UK, HMRC or CRA pages we read name Stripe, PayPal or any other payment service. The IRS page covers fees on payment card and third party network transactions, the CRA says bank charges include those for processing payments, and GOV.UK lists bank, overdraft and credit card charges. Our reading is that a fee a payment service charges you for taking a client's payment is a bank or payment charge in all three countries, but check with your tax office or an adviser if you're unsure.
• No US line is named: the small business publication lists bank fees with no more detail, and the instructions we read don't say which line bank or payment fees go on; one line is for commissions and fees and the other expenses part is for costs not deducted elsewhere. Our reading is that either can be argued, so use one consistently and keep a note of what's in it.
• Two Canadian lines: the interest and bank charges line has bank charges in its name, but its page is about interest and loan fees, while the management and administration fees page says it includes bank charges and those for processing payments. Our reading is that the CRA's pages point everyday bank and processing charges to the management and administration fees line; whichever line you use, don't claim the same fee twice.
• The CRA guide and the line page: the guide's sentence for the management and administration fees line doesn't mention processing payments; the line page, with a later page date, does. Our reading is that the line page adds detail rather than changing the rule.
• Fees taken before the money reaches you: the IRS says the payment form's gross amount isn't adjusted for fees and that you can deduct them, but the UK and Canadian pages we read don't say how to record a payout that already had the fee taken off. Our reading is that recording the full amount and the fee separately is the clearest record everywhere and matches the reports payment services send; ask an adviser if you're unsure.
• An account you also use privately: all three tax offices say to count only the business part, but none of the pages we read say how to split the fees on an account or card used for both. Our reading is that you should use a reasonable method you can explain and keep a note of it. Whether you need a separate account for the business isn't covered here; our business name guide has what the US Small Business Administration says about a business bank account.
• Interest isn't a fee: GOV.UK's financial charges list and the return notes' box also cover interest and finance payments, and the CRA has interest rules of its own. Our reading is that interest and repayments should be kept apart from fees in your records, since they follow different rules.
• Exchange and conversion fees: the pages we read don't mention fees for converting a foreign payment. Our reading is to record a fee the statement shows as a fee, and to treat a difference in the exchange rate under the exchange rules covered in our guide to invoicing international clients.
• Page dates and editions: the IRS publication and instructions are the editions for the latest tax year, and the CRA guide is its latest edition; GOV.UK's expenses pages carry older page dates. Our reading is that the rules above are current, but check the live pages and later editions before you file.
• What we did not check: interest on loans, overdrafts and credit cards; fees for arranging a loan; leasing, hire purchase and alternative finance; any cash basis rules on interest and finance costs; charging clients a fee for paying by card; refunds, chargebacks and disputes; exchange gains and losses; the payment form's reporting rules beyond the lines above; VAT, GST/HST and sales tax on fees; employees, partnerships and companies; the short self-employment pages line by line; US state rules; Quebec and provincial rules; other countries' rules.

When to get advice

• you borrow money for the business or pay interest on a loan, overdraft or card;
• an account or card is shared between business and personal spending;
• you're paid in foreign currency or through several payment services;
• you charge clients a fee for paying by card;
• a payment service's report or a tax form doesn't match your records;
• you have a partner or a company, or you're registered for VAT, GST/HST or sales tax.

Talk to an accountant or a tax adviser in your country. This page is general information only.

Related

• Freelance expense tracking
• Schedule C for US freelancers
• UK Self Assessment for freelancers
• Canadian self-employment statement for freelancers
• Form 1099-K and payment apps
• Invoicing international clients

Sources

• United States: IRS: Publication 334 (2025), Tax Guide for Small Business, page date 30-Apr-2026 · IRS: Instructions for Schedule C (Form 1040) (2025), page date 30-Apr-2026 · IRS: What to do with Form 1099-K, page date 27-Jul-2026
• United Kingdom: GOV.UK: Expenses if you're self-employed, page date 2024-11-08 · GOV.UK: Expenses if you're self-employed, legal and financial costs, page date 2024-11-08 · HMRC: Self-employment (full) notes (Tax year 6 April 2025 to 5 April 2026 (2025–26), PDF)
• Canada: CRA: Expenses section of Form T2125, page date 2026-08-31 · CRA: Line 8871 – Management and administration fees, page date 2026-08-31 · CRA: Line 8710 – Interest and bank charges, page date 2026-08-31 · CRA: Guide Self-employed Business, Professional, Commission, Farming, and Fishing Income: Chapter 3 – Expenses, page date 2026-04-16

Checked 2026-10-20. Found a mistake? Tell us via Support.