How to record PayPal fees and sales in QuickBooks
Record PayPal sales gross, fees as an expense, and transfers to the bank to the cent, using one journal entry per withdrawal built from PayPal's activity download.
What you need to record
Each PayPal sale arrives net of its fee, money may sit in PayPal for days, and refunds, holds and currency conversions move the balance too. To keep books right you need gross sales, fees, refunds and the transfers to your bank. A PayPal clearing account (a bank-type account in QuickBooks called “PayPal”) is the usual home for this.
Step by step
- In PayPal: Activity › Download, choose Balance affecting transactions in CSV for the period.
- Drop the file above. PayoutSplit checks PayPal's running balance on every row (a break means rows are missing) and groups activity up to each withdrawal to your bank.
- Set account names once: Sales, PayPal fees, Refunds, Checking, and your PayPal clearing account.
- Download Journal CSV for QuickBooks Online or IIF for QuickBooks Desktop, import it, then match each bank deposit in your feed.
Common mistakes
- Recording only the net deposit: understates sales and loses the fee expense.
- Downloading “All transactions” without balance-affecting rows: leaves gaps, which PayoutSplit flags.
- Mixing currencies: each currency is kept separate; conversions go to a clearing line you can review.
FAQ
Where do PayPal fees go in QuickBooks?
Usually an expense account such as “Merchant fees” or “Bank charges”. Ask your accountant which account you use; PayoutSplit lets you name it.
Is it really private?
Yes. Your files are read and processed by JavaScript running in your browser tab; their contents are never sent over the network. You don't connect PayoutSplit to Stripe, PayPal, Square, Shopify or your accounting software, so there's no access to revoke later.
Which processors are supported?
Stripe (payout reconciliation itemized and balance change from activity reports), PayPal (activity download, English headers), Square (Transactions CSV and Transfers CSV) and Shopify Payments (transactions export). Bank files from any bank can be added for deposit matching.
What does a payout journal entry look like?
Debit your bank for the deposit, debit processing fees, refunds and chargebacks, and credit gross sales (plus sales tax and tips payable when the export has them). The entry always balances, and the bank line equals the deposit to the cent.
I already record sales another way. Will this double count?
Only if you leave Sales income pointed at your real income account. If your POS or store already books each sale, set Sales income to the clearing or Undeposited Funds account under Your account names — the journal then just moves the net to the bank and records the fees.
What if a payout doesn't add up?
When the export includes the payout row (Stripe balance report, Shopify, PayPal withdrawals), PayoutSplit compares it with the sum of the transactions. A difference is flagged and booked to the clearing account so you can investigate instead of importing a wrong number.
What's free?
Every export format for up to 10 payouts per download, one processor file plus one bank file at a time. No account needed. Pro removes the limit and lets you combine several exports and processors in one go.