How to Record Shopify (and Stripe) Payouts in Xero

What’s actually inside a Shopify or Stripe payout

Every payout is a bundle. Before you can record it, you need to know what the processor rolled into that one deposit. The components are almost always some combination of the following, and together they explain the entire gap between your gross sales and the cash you received.

1. 1Gross sales — the full GST-inclusive value your customers were charged (product plus shipping).
2. 2Processing fees — the percentage-plus-fixed fee the processor charges on each transaction.
3. 3Refunds — money returned to customers, which reduces both your revenue and the GST you collected.
4. 4Chargebacks — disputed transactions clawed back from your balance.
5. 5Chargeback fees — a flat penalty the processor charges each time a chargeback is raised.
6. 6Reserves — an amount the processor holds back temporarily and releases later; it’s your money, just not paid out yet.
7. 7Adjustments — occasional corrections, currency conversion differences, or prior-period true-ups.

The correct method: use a clearing account

The professional way to record a payout is a journal entry through a clearing account (also called a payment-processor clearing or undeposited-funds account). Instead of forcing the net deposit into one account, you record every component at its true value and let the clearing account absorb the cash movement. Done right, the journal’s debits equal its credits, and the amount hitting the clearing account equals the exact deposit — so it clears to zero against the bank line.

The logic is simple: credit your income and GST for the full gross value of what was sold, then debit each cost (fees, refunds, chargebacks, reserves) and the net cash. Because you started from gross and subtracted every real deduction, whatever is left over must equal the deposit. If it doesn’t, something is missing — and that’s a feature, not a bug.

1. 1Pull the payout report from Shopify Payments or Stripe and note the gross sales, each fee type, refunds, chargebacks and any reserve.
2. 2Credit Sales revenue with the ex-GST portion of gross sales (gross divided by 1.1 in Australia).
3. 3Credit GST collected with the GST portion (1/11 of gross sales).
4. 4Debit Processing fees expense for the total fees.
5. 5Debit Refunds/Chargebacks (or contra-revenue) for money returned and clawed back, including chargeback fees.
6. 6Debit a Reserve receivable (an asset) for any amount held back, so it isn’t lost — you’ll clear it when released.
7. 7Debit the Bank clearing account with the net deposit; confirm debits equal credits and the clearing amount equals the actual bank deposit.

A worked example that reconciles to the cent

Say a payout covers $10,860 of gross charges and lands as an $8,640 deposit. The $2,220 difference is made up of $318 processing fees, $240 refunds, $120 chargebacks, $25 chargeback fees and a $1,517 reserve.

Credits (total $10,860): Sales revenue $9,872.73, GST collected $987.27. Debits (total $10,860): Bank clearing $8,640, Processing fees $318, Refunds and chargebacks $385 ($240 + $120 + $25), Reserve receivable $1,517.

Check the two proofs. The accounting proof: debits $8,640 + $318 + $385 + $1,517 = $10,860, which equals the credits — the entry balances. The bank proof: gross $10,860 − fees $318 − refunds $240 − chargebacks $120 − chargeback fees $25 − reserve $1,517 = $8,640, exactly the deposit. When the reserve is later released, you clear the $1,517 receivable against that future payout.

One simplification to be aware of: this example folds refunds and chargebacks into a single GST-inclusive contra line and shows GST on the full gross for clarity. In a precise entry you would reverse the GST on the refunded portion — so the refund reduces both Sales revenue and GST collected — leaving net GST matched to net sales. Vert handles that split automatically; by hand, code the refund line GST-inclusive so it reverses correctly.

How GST works on Shopify sales in Australia

In Australia, the price your customer pays is GST-inclusive, so the gross charge already contains the tax. To split it, the GST is 1/11 of the gross amount and the ex-GST revenue is the gross divided by 1.1. In the example, $10,860 gross gives $987.27 of GST (10,860 ÷ 11) and $9,872.73 of sales (10,860 ÷ 1.1). Never treat the whole gross figure as revenue — you’d overstate income and understate the GST you owe.

Two things trip people up. First, processing fees from Australian processors are generally GST-inclusive too, so the expense carries its own GST credit — code it with the correct tax rate rather than as GST-free. Second, refunds reverse GST: refunding a sale reduces both your revenue and the GST collected on it.

Where this gets hard — and how Vert automates it

Doing one clean journal is manageable. The pain is that real months are messy: reserves that release across periods, chargebacks that reverse later, multi-currency conversions, refunds that straddle two payouts, and the constant job of proving each payout sums back to the deposit to the cent. Connector tools tend to post a rough summary and dump whatever doesn’t fit into a suspense account for you to chase.

Vert is agentic month-end reconciliation built for this. It ingests each Shopify Payments and Stripe payout, decomposes it, and proves the parts equal the deposit — deterministically, cents-exact. It splits revenue and GST correctly, drafts a balanced journal entry into Xero for one-click approval, and resolves the exceptions other tools leave behind — or explains exactly why it couldn’t. Nothing posts without your approval, and every number traces back to its source.