Can you deduct payment processor fees in Canada?

Yes — in Canada, payment processor fees are generally deductible as a business expense if they were incurred to earn business income.

For most businesses, you would usually:

• report your sales at the gross amount, and
• deduct the processor fees separately as a business expense.

How this is usually handled:

• Sole proprietors / self-employed: these fees are commonly reported on Form T2125 as a business expense, but the exact line/category can vary.
• Incorporated businesses: they are generally deducted on the corporation’s tax return as an ordinary business expense.

Important cautions:

• The expense must be reasonable and actually business-related.
• Keep statements or reports from your processor as backup.
• Different processors may structure fees differently, and the tax treatment can depend on the exact service and your situation.
• GST/HST treatment can also vary, especially if you’re registered for GST/HST, so it’s worth checking CRA guidance or a tax professional for your specific case.

So, in general, yes — you can usually write off payment processor fees in Canada, but the precise reporting and GST/HST treatment should be confirmed for your circumstances.