Bank & Finance Charges — Australia Tax Rules

Claim business bank fees, loan interest, and payment processing charges.

Claimable: Fully claimable · Tax authority: ATO

ATO Rules

• Business bank account fees and monthly charges are fully deductible.
• Interest on business loans is claimable — capital repayments are not.
• Payment processing fees (Stripe, Square, PayPal, Tyro) are deductible.
• Foreign currency exchange fees on business transactions are claimable.
• BPAY, direct debit, and merchant facility fees for business are deductible.
• Personal bank charges are NOT deductible — maintain a separate business account.

Limits

No cap — must be incurred for business purposes. Personal banking costs are not claimable.

Worked Example

Noah's ANZ business account costs $12/month ($144/year). He pays $380 in Stripe processing fees and $220 in loan interest on a business equipment loan. Total: $144 + $380 + $220 = $744.

Record Keeping

• Keep bank statements showing all fees and charges
• Retain payment processor statements (Stripe, Square, PayPal)
• Keep loan agreements showing interest terms and amortisation schedule
• Separate business account statements from personal accounts
• If GST-registered, note that most financial services are input-taxed (no GST to claim)

Frequently Asked Questions

Can I claim interest on a home loan used for business?

Only the proportion of interest relating to business borrowings. If you borrowed against your home to finance business equipment, that portion of the interest is deductible. Keep clear records of how the borrowed funds were used.

Are PayPal fees deductible?

Yes. All payment processing fees for business transactions — Stripe, PayPal, Square, Tyro — are fully deductible operating expenses.

Can I claim bank fees on a personal account used for business?

Only the proportion attributable to business transactions. The ATO strongly recommends keeping a separate business account — mixing personal and business makes records harder to substantiate.

Are financial services subject to GST?

Most financial services (bank fees, loan interest, insurance premiums) are input-taxed under Australian GST law — meaning there is no GST on them, and you cannot claim a GST credit. The full fee is deductible as a business expense in your income tax return.