Avoiding hidden fees: A guide to payment surcharges in Australia

Published 6 March 2026

Table of contents

• What is a payment surcharge?
• The rules on card surcharges
• How to calculate and apply a fair surcharge
• Lower payment costs with Xero
• FAQs on payment surcharges in Australia

Key takeaways

• Payment surcharges help businesses recover processing costs. You can add a small fee to EFTPOS, debit, and credit card payments to offset the merchant service fees that providers like banks, Stripe, and Square charge.
• The ACCC restricts surcharges to cover actual processing costs only. The surcharge percentage should not generate profit and must be clear to customers before they pay.
• You can use accounting software to track merchant service fees in Australia. This type of software automates your invoices, applies correct surcharge rates, and integrates with payment provider terminals and software to simplify your compliance.

What is a payment surcharge?

A payment surcharge is an additional fee Australian businesses may add when customers pay with EFTPOS, debit, or credit cards. It isn’t meant to generate profit – businesses use it to recover the merchant service fees they pay to banks or payment processors, such as Square or Stripe, for handling card transactions.

For example, if a payment provider charges a business a 2% fee for Visa, Mastercard, and EFTPOS payments, the business may set up a 2% surcharge for customers who pay with one of those methods. Passing fees to customers helps businesses recover this cost.

The fee does not apply to cash or bank transfer purchases, and it’s important for customers to be aware of this added cost before they pay. By applying a fair and transparent surcharge, business owners can cover their costs and stay compliant with Australia credit card surcharge rules.

The rules on card surcharges

The Australian Competition and Consumer Commission (ACCC) enforces Australia credit card surcharge rules to protect consumers. Key requirements include:

• the fee can only cover the cost of processing transactions – you cannot impose a surcharge for profit or to cover other business expenses
• the surcharge must be clearly visible to shoppers before they pay
• the amount must be reasonable and reflect the actual cost of the card used
• different card types may have different surcharges, based on their processing fees
• the surcharge cannot be applied multiple items for the same transaction

You don’t have to pass on payment fees in the form of a surcharge – you can choose to absorb the cost or incorporate it into your pricing strategy. You can also charge a flat fee instead of a percentage, but it still needs to be less than the total cost of acceptance (the fees you pay to process the card payment). In most cases, passing the surcharge on as a percentage is the easiest and most practical option.

Costs to include in a surcharge

The RBA sets standards for the costs that businesses can include in the total cost of accepting a card payment, and the ACCC enforces compliance. When setting a card payment surcharge, you can only include approved merchant fees in Australia. Here are some examples:

• Merchant service fees charged by your bank or payment processor
• EFTPOS or terminal rental and maintenance fees
• Online payment gateway fees
• Fraud prevention or chargeback-related issues

You cannot include unrelated operational costs like staff wages, rent, utilities, or general administration. Your surcharge must not exceed the total cost of acceptance for the payment method used.

In most cases, GST applies to the surcharges just as it does the main transaction. Essentially, if tax applies to the underlying sale, it also applies to the surcharge.

Here’s more about payment surcharges from the ACCC.

How to calculate and apply a fair surcharge

There is no fixed minimum, average, or maximum national rate for credit card charges for business. However, you can calculate the right surcharge to add on by assessing your merchant statements, which should include the average cost of acceptance for each payment method. Your payment facilitator or bank provides these documents every month.

To calculate a fair and accurate surcharge:

• Check your merchant statement to find the average cost per transaction for each card type.
• Include other costs approved by the RBA, such as the payment terminal rental fee, in your calculation.
• Set individual rates for each payment method or use the lowest rate to set one consistent surcharge for all card payments.
• Review and update your surcharge regularly to reflect changes in your processing costs.

Payment facilitators often charge different fees for debit and credit cards. For example, Visa might charge 2% for credit card transactions but just 1% for debit card payments. In this case, you can either:

• Apply separate surcharges for Australia debit and credit card payments.
• Apply the lower fee (1%) to all Visa payments. This effectively means the business absorbs the extra cost for credit card transactions. You can’t average the two fees to 1.5% because this would exceed the actual cost for debit card transactions and could be considered profit, which isn’t allowed.

To keep your business payments compliant in Australia, it’s a good idea to:

• keep records to demonstrate any extra costs that influence the surcharge
• check your merchant statements regularly, so you can update your surcharge when things change

Lower payment costs with Xero

Xero lets you easily set up payment surcharges on invoices to help recover eligible payment processing fees. You can automate invoices so surcharges are applied when customers pay using supported payment methods.

Xero also supports different surcharge rates for different payment types and integrates with payment providers like Square and Stripe. These integrations help you record payments and feeds in Xero, making it easier to track surcharges and reconcile transactions.

Get one month free.

FAQs on payment surcharges in Australia

Here are some answers to frequently asked questions about payment surcharges in Australia.

What is the maximum credit card surcharge in Australia?

There is no fixed national maximum credit card surcharge in Australia. Instead, the maximum surcharge is determined by your actual payment processing costs. You can only pass on the merchant service fees you pay to accept card payments, including debit cards processed through the EFTPOS network and credit cards such as Visa and Mastercard.

It’s usually no more than 2% for Visa and Mastercard credit card transactions, and lower for debit card payments.

But other payment methods, like American Express, JCB, and PayPal, don’t have to follow the same regulations. Your business may therefore impose higher surcharges for these payment types.

Is there GST on a credit card surcharge?

Sometimes – it depends on the purchase. GST and payment surcharges follow the same rules, so if you charge GST on your products or services, GST applies to the surcharge, too. But if you’re processing GST-free transactions, then the surcharge is also free of GST.

Here’s a guide to calculating GST in Australia

Can I choose to add a surcharge only for payments below a certain amount?

In some cases, you can selectively apply a surcharge based on the total transaction amount. The ACCC gives you some flexibility here as long as the structure remains fair and transparent.

You might choose to apply a surcharge to discourage smaller credit card transactions but absorb the cost to process larger amounts. But customer payment transparency is essential – they should know when a surcharge applies, and why, before they complete their payment.

Can I add an EFTPOS surcharge?

Yes, but only if the merchant service provider charges you a fee to process these transactions. EFTPOS often has a lower fixed fee per payment than credit cards, or can even be free, so some business owners choose not to impose an EFTPOS surcharge. Instead, they absorb the cost and only add a credit card surcharge when passing fees to customers.

Do I need to offer a fee-free payment method?

To maintain payment transparency and trust, you should offer customers at least one surcharge-free way to pay, such as cash or direct bank transfer. While options like PayPal and PayID can work, they have their own processing fees that don’t follow the same ACCC surcharge limits as EFTPOS, Visa, and MasterCard.

If you don’t offer any surcharge-free payment methods, you must include the minimum surcharge in your displayed prices. This lets customers see the full cost upfront and avoids adding an unavoidable surcharge when they pay. In this case, you don’t need to separately disclose the surcharge amount or percentage.

Here’s a guide to accepting payments online

What evidence should I keep to justify my surcharge?

The ACCC might ask you to prove that the surcharges on your point-of-sale machines reflect your actual processing costs. So keep evidence of your surcharge rate, such as merchant statements and invoices or receipts that include the surcharge. If you use Xero, your Xero records you have in Xero can also act as evidence to justify the surcharge.

It’s also a good idea to:

• create a brief summary document that explains how you determined the percentage to set for your surcharge
• collect evidence of how you ensure customers can see the fee, such as a prominent note on an invoice or a clear label on the payment terminal

What is the status of the Australia debit card surcharge ban in 2025?

The RBA has not introduced an Australia debit card surcharge ban in 2025, but it may take effect in 2026. The central bank argues that card payment costs are too high for both consumers and businesses.

The RBA’s card payment regulations may save businesses over $1 billion in fees each year and would be particularly helpful for small businesses.