GST on Credit Card, Debit Card and ATM Fees

Credit Card Surcharge

A credit card surcharge imposed by a merchant on a customer in respect of a credit card transaction:

The ATO states, that this surcharge forms part of the price for a supply of goods or services to the customer.

There are two treatments on supply of goods or services:

  1. taxable – most goods and services;
  2. GST-free – education, medical, some food items, etc. as well as payment to the ATO, ASIC etc.

Then the GST on surcharge will have the same treatment.

Where a surcharge is imposed on payment for more than one supply, the ATO requires to apportion the surcharge using fair and reasonable method.


Nadine purchased $55 (including GST) of cleaning goods and $50 of fruits and vegetables from a supermarket. Total amount payable by Nadine is $105.

The supermarket imposes a surcharge of $5 if payment is made using a credit card.

The GST payable on the supply will therefore be $5.23 which is 1/11 of the GST inclusive price of the cleaning products plus the 1/11 of the 50% of the $5 credit card surcharge.

Same treatment for both – Merchant & Customer

Debit Card Surcharge – Withdrawal of Cash

A merchant who imposes a surcharge on a customer for withdrawing cash through a debit card transaction makes a taxable supply under ATO ruling. The merchant is supplying the customer with the service of accessing the relevant payment system through the use of the terminal to authorise the transaction, therefore, surcharge will be a taxable supply.

On other hand, where a customer uses a debit card to satisfy an outstanding liability for a supply of goods or services and incurs a debit card surcharge, the surcharge is additional consideration for the supply of goods or services. In this case the GST treatment is the same as for a credit card surcharge above.

ATM Services

Where an ATM provider (e.g. a bank or other financial institution) charges a fee of not more than $1,000 to access one or more of the ATM services listed below, the ATO considers the supply of those services to be a financial supply and therefore input taxed and not subject to GST:

  • A withdrawal from an account;
  • A deposit into an account;
  • An electronic transfer from an account; and
  • Advice on the balance of an account.

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