How-to · Banking and cash
How to record a bank fee
Record a bank fee as an expense: debit Bank Service Charges and credit the bank account, dated the day the bank took it. Enter it when you see it on the statement or in the bank feed, so the reconciliation balances.
How-to guides / Bank fee
The accounting behind it
Fees come straight out of the account, often without a receipt, so the bank statement is the record. If you don't enter them, your book balance stays higher than the bank's.
Use one expense account (Bank Service Charges) for monthly, wire, overdraft and NSF fees. Card processing fees often get their own account so you can see what card payments cost.
Interest charged on a loan or overdraft is interest expense, not a bank fee.
| Account | Debit | Credit |
|---|---|---|
| Bank Service Charges | Fee | |
| Bank | Fee |
Worked example: a month's fees
Your March statement shows a $14.95 monthly plan fee and a $25.00 outgoing wire fee. Record $39.95 to Bank Service Charges, dated on the days they were charged.
| Account | Debit | Credit |
|---|---|---|
| Bank Service Charges | $39.95 | |
| Checking | $39.95 |
Common mistakes
- Ignoring small fees, so every reconciliation is a few dollars out.
- Coding loan interest as a bank fee.
- Recording a fee the bank later reverses without recording the reversal.
In the US and in Canada
United States
Bank fees for a business account are an ordinary business expense. Fees on a personal account used for the business generally aren't, which is one more reason to keep a separate business account.
Canada
Most bank service charges are exempt financial services for GST/HST, so there is usually no input tax credit to claim on them.
In AcboBooks
- From the bank feed. In Banking → Bank Feeds, choose Bank Service Charges as the category on the fee line and click Accept. Rules can do this automatically for fees that repeat.
- Or by hand. Go to Banking → Write Checks (Write Cheques in the Canadian edition). Choose the Bank account, put the bank in Pay to the order of, leave Check # blank, and on a line choose Bank Service Charges with the amount. Click Save Check.
- Reconcile. The fee then appears in Banking → Reconcile to tick off against the statement.
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Questions
What account do bank fees go in?
An expense account such as Bank Service Charges.
Are bank fees tax deductible?
Fees on a business account are generally a deductible business expense.
Is there GST/HST on bank fees?
Most bank service charges are exempt financial services, so no GST/HST is charged or claimed.
Related how-to guides
- How to record interest earned
- How to record a bounced check (NSF cheque)
- How to reconcile a credit card statement
Terms used here
Updated October 25, 2026. General bookkeeping information, not tax, legal or accounting advice. Rules differ by state and province and change over time; check with the IRS, the CRA or your accountant for your own situation.
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