08 Jul 2022

Do bank overdraft fees have GST?

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Australians pay about 10% in goods and services tax (GST) for each product purchased. This amount, though, does not qualify or include financial services offered by banks, creditors, and lenders. Instead, no bank fees have GST. You won’t have to make an additional tax payment on bank statements, including late and penalty fees.

It is never good to have an overdraft fee on your account. An overdraft fee is a fee that people have to pay their banks when the account is overdrafted. When an account has gone to overdraft, this indicates that the amount left is negative. Try to keep a minimum of $100 in your bank account at all times. It is easy to forget about recurring subscriptions, and one wrong move can have your account diving into the negatives. When a bank account is negative, though, the system automatically senses this and charges the fee to the account, leading to an increasing negative number.

Most of the time, overdraft fees are as small as $35. However, they vary depending on the bank institute. You can also set up for your bank to take money automatically from your savings account to place in your checking account when low or negative to save on overdraft fees.

Overdraft Fees and GST Conclusion

Overdraft fees are already painful. Thankfully, you don’t have to pay GST on top of the fees. Instead, the amount listed in the terms and agreements is what the fee is. Mortgage House offers loan solutions to fit your personalised needs.

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