Online Charitable Donations and Transaction Fees: What Can Be Receipted?

Authored by Derek B.M. Ross.

In our most recent CCCC Bulletin, we noted that fees charged by a third party payment transfer agent (e.g. PayPal) for online donations are not considered receiptable gifts by CRA. We have clarified with CRA that this only applies to fees charged by the agent against the donor directly. For example, if a donor makes an online donation of $100 to charity via a payment transfer agent, the donor may be charged an additional transaction fee by the agent. The donor would be entitled to a $100 receipt for the donation, but not for the additional fee the donor paid to the agent.

However, the charity may also pay administrative fees to the payment transfer agent for the transaction – those would be considered an expense on the part of the charity, and the donor’s receipt would not need to be reduced by that amount (the same would be true of fees charged by credit cards to charities). In other words, fees charged directly to the donor are his/her own expense, for which the charity can not issue a receipt. Fees charged to the charity for its own expenses, however, need not be deducted from the amount on the donor’s receipt.

Noteworthy is provided for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.