I wasn’t going to write this one. Then a salon owner I like posted a perfectly sensible reel about building the card fee into her prices, and the comments turned into a group therapy session about the government stealing 47 cents in every dollar.

The comment that got the most likes went like this: “The government takes 47%, plus 10% GST on the price rise. $100 minus tax is $43. $105 minus tax is $45.15. So you only got $2.15 of your $5 rise. The extra charge is actually not income.”

So. Let’s do the thing I do for a living: find the real problem, not the one you think you have.

Before the maths, the picture. Two receipts. Same client, same service, either side of 1 October.

Before: the client paid $95.69, you kept $94.00. After, at $96: the client pays 31 cents more, you keep 27 cents more. If you’d rather be exact, price at $95.69 and absolutely nothing changes for anyone. If your client notices 31 cents and leaves over it, they weren’t your client.

The only scenario where you’re worse off is the one where you refuse to touch your prices out of principle and eat the fee. That costs you about $1.20 a service after tax. It’s the single most expensive principle in the thread, and it’s self-inflicted.

What follows is every argument the thread made, what is actually true, and the maths behind each one. Read it once and you will never fall for the 47% line again.

I’m not naming anyone, because the point is the pattern, not the person. These were the arguments, roughly in the order they arrived, and the short answer to each. The long answers, with the maths, follow.

I believe you. On $50,000 a month of card sales at 1.8%, that’s $900. It’s also 1.8%. The question isn’t whether $900 is a lot of money. It’s whether 1.8% is a lot of margin. It’s less than your colour wastage. Less than one no-show a week. If 1.8% is the difference between open and closed, the surcharge was never your problem.

When we ran our shop in the Blue Mountains, the merchant statement came every month. A couple of hundred dollars, from memory. To us it was the cost of doing business, in the same column as the rent and the eftpos machine. Same with the beauty businesses I ran from home. I never passed on a surcharge, a bank fee or an eftpos fee in my life. The whole concept is foreign to me. You build it into the price. I assumed everyone did.

It is the top marginal rate, and it applies only to each dollar of taxable profit above $190,000. Not to revenue. Not to the price of a haircut. The chart below shows what you actually pay.

The surcharge was always income, and the card fee was always a deduction. Move the fee into the price and both move together. Profit changes by three cents. The ledger below shows it.

You collect GST on the extra, and you claim GST back on the merchant fee. There is no second tax. Same ledger.

Sure, for the fee. Not for the tax. A PayID is a bank transfer with a nicer name. The money is income the second it lands, same as a card payment, same as cash. If you are audited and the PayIDs haven’t been declared as genuine income, you already have a much larger issue than a card fee. Receiving money a different way does not change what it is.

Fine. Then let’s be principled about the whole thing. The principle is that your client should pay for the service you deliver at a price that covers your costs, including the cost of getting paid. Every other business in the country does this. The baker doesn’t itemise the flour. For the record, I didn’t bat an eyelid when businesses started passing the surcharge on, either. I thought, why bother. But whatever they wish. Just build it into the pricing was always my thought.

The surcharge is gone. The fee is not. It was never going to be. And on the same day the surcharge went, the RBA cut the wholesale cost of taking a card by more than half, so if your merchant rate hasn’t moved, the person to be annoyed at is your payments provider, not the government. Move the fee into the price. Round to a number a human would say out loud. Done.

Taxable income means profit. Not your turnover. Not the money that went out the door on rent, product, wages, software, insurance, super and the card fee. What’s left. If you run as a sole trader, it’s that profit plus whatever else you earn. If you run a company, the company pays 25% flat as a base-rate entity, and you pay personal tax on what you actually take out. Either way, the number the rate applies to is what remains after deductions. The card fee is one of the deductions.

Clear a profit of $120,000 after everything and your effective rate is about 24%. Clear $190,000 and it’s about 29%. To pay an effective 47% on the lot you’d need a profit so large the first $190,000 rounds to nothing. Think millions. About five in every hundred Australian taxpayers even touch the top bracket. The median taxable income in this country is $58,739.

The “$100 minus tax is $43” sum treats every dollar you bank as if it were your 190,001st dollar of pure profit. It isn’t. It’s revenue. Some of it is GST that was never yours. Some of it is the card fee that goes straight back out. Some of it is rent. What’s left is taxed on a sliding scale that starts at zero.

Now the GST bit, because this is the part where the chart of accounts matters and nobody in the thread had opened theirs.

Before 1 October, the surcharge you charged was income. It took the GST status of the service it was attached to. A haircut is taxable, so one-eleventh of that surcharge was GST you collected for the ATO. That’s been the ruling since 2014. It was never “not income”.

The merchant fee your provider charged you was an expense. Bank fees and charges. Deductible. And here’s the correction I had to make to my own assumption while writing this: card merchant fees have GST in them. Westpac, CommBank, NAB, Square, Stripe. All of them. “No GST on bank fees” is true of account-keeping fees and interest. It is not true of card acquiring. Which means you claim it back. Look at your last merchant statement. It’s there.

So when you move the fee into the price, both sides of the ledger move together. One writes off the other. One cancels the other out. Whichever way of saying it makes sense to you.

Income up $1.55 ex GST. Expense up $1.58 ex GST. Profit down three cents. Tax on three cents at a 30% marginal rate is about one cent. The 16 cents of GST you collect on the extra is the 16 cents of GST you claim back on the fee.

That’s the entire “extra tax”. One cent. On a $96 haircut.

So let’s call it what it is: an absolute overexaggeration. You are moving an expense from one line of your chart of accounts to another. It is not an additional expense. The client’s cost stays the same. The only way the client ends up paying more is if the maths isn’t done and the new price lands higher than the old price plus the fee, and that means you’re taking a bit extra for yourself. Which is fine. Just don’t blame the government for it.

I say this as the first to admit I made a huge mess of my own. I am far more worried about my non-lodgement fines on BAS than about where a surcharge gets allocated on my chart of accounts. One of those is a real problem. The other is a line item.

It was never about a dollar seventy-five. The surcharge is just the place where a bigger problem surfaced, in public, with likes.

I’m not writing this from a mountain. You read about my own mess above, and that’s a piece for another day. It’s also exactly why I’m qualified to say this: the maths was never the hard part. Facing it is.

I say that with love, as a woman who has been one of the random girls. The difference is who you learn from next. Your accountant is not a once-a-year receipt-sorter. Make them earn the fee. Ask them the questions below until you can answer them yourself.

The surcharge is gone. Good riddance. It was a line on a receipt that made the cheapest part of running a business look like the most important. Now the only thing on the receipt is your price, and your price is your business.

I’ll keep calling it like I see it. Even when it’s a room full of women I like, and even when the comments won’t.