Consider Paypal fees in accounting?

Question

I'm a freelancer. I sent an invoice to my client (using InvoiceBubble.com), which he decided to pay via Paypal. Paypal took a fee. How do I take this fee in consideration for my accounting? I marked the invoice as paid for $877.83 but really I received $852.07. How does this work with accounting and taxes? Now that's not a big difference, but it can add up with several clients, some with much larger amounts.

Answer 1

Mark the fees as an expense. You can even call them Paypal Service Fee Expense.