One of the regular mistakes that I find when I am looking at my clients accounting files is the incorrect usage of tax codes in banking transactions. So help with this I have created a list of the type of banking transactions you might come across and the correct tax code to use in your particular Accounting Software:

    • For Bank Interest earned (INCOME)
      • MYOB – ITS
      • Reckon Accounts – INP
      • QuickBooks Online – Input Tax
      • XERO – Input Taxed
    • For Bank Interest EXPENSE
      • MYOB - FRE
      • Reckon Accounts - NCF
      • QuickBooks Online - GST Free Non-Capital
      • XERO - GST Free Expenses.
    • For Bank Fees charged to your account (other than Merchant type fees), such as Transaction fees and other account type fees
      • MYOB - FRE
      • Reckon Accounts - NCF
      • QuickBooks Online - GST Free Non-Capital
      • XERO - GST Free Expenses.
    • For Merchant Fees
      • MYOB – GST
      • Reckon Accounts - NCG
      • QuickBooks Online - GST on Non-Capital
      • XERO - GST on Expenses.
    • For International bank transaction fees
      • MYOB - FRE
      • Reckon Accounts - NCF
      • QuickBooks Online - GST Free Non-Capital
      • XERO - GST Free Expenses.
    • And finally, make sure you record any interest expenses, ie, Credit Card interest, Debit interest charges on a bank account, to the Interest expense account and NOT to the Bank Fees Expense account.