Proper reporting on online giving fees.

by Tony Tucker
(Rock HIll SC)

If someone gives online $100 and the church is assessed a $ $2 fee, how should that be recorded?

Should revenue be credited for $100, Cash debited for $98 and Online Tithe Expense debited for $2?

OR

Should revenue be credited for $98 and cash debited for $98?


Comments for Proper reporting on online giving fees.

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Recording Online Contributions
by: Ed D.

The fees are fees whether covered by the donor or the church. When we began online contributions we setup our books as follows: (We use an online provider to process the transactions and they get their fee first). We setup an income account in our books "XYZ Fee Income" (XYZ being our online provider). Then, say a donor provides a $100 donation and they chose to cover the $1.50 fee. Their total donation is $101.50. In our books we record a $100 deposit to the church bank account, and $1.50 to the "XYZ Fee Income". Then we expense the $1.50 as "XYZ Fee Expense". The fee never hits the bank, but the above method allows us to track our Fee expenses. The donor's contribution statement will reflect the full $101.50 contribution. It works exactly the same if the donor does not cover the fee. For example a donation of $100, we would record a deposit of $98.50 as a deposit to the church bank account, $1.50 to the "XYZ Fee Income", and $1.50 to "XYZ Fee Expense". The donor's contribution statement will reflect the full $100.00 contribution.
Full Credit for ALL of Donation
by: Vickey

Even if the donor elects to "pay the processing fee", you must record and include on their giving receipt...the total amount they donated.

For example, if they gave $100 and elected to pay the $1.50 processing fee...their total donation would be $101.50

Then when you record the $100 "deposit" in your accounting software, you would enter $101.50 on the proper income account (if you are using another software for donation tracking) and a negative $1.50 assigned to the expense account you have set up for tracking those processing fees...as the church is still technically paying for those processing fees =)
What if fee is paid by Donor?
by: Anonymous

The response is clear if the processing fee is charged to the church, but it is not clear how to record if the fee is deducted from the donation by the processing company. If the fee (ex: $1.50) is deducted from the donation before being sent to the church, is the donor credited for the full $100 with the church electing to cover the fee, or only for the amount actually received, $98.50?
And, if the church covers the fee, is the full $100 considered a charitable contribution?
Donor gets Full Credit
by: Vickey

Your first way is correct. If someone donates a $100...you want to acknowledge the full donation in your donation and accounting records.

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