POS fees
In one sentenceThe fees the bank deducts from card sales made through point of sale (POS) terminals, such as mada cards, together with the VAT on the fee.
Simply put
When a customer pays by card, you do not receive the full amount: the bank deducts its fee and the VAT on it, then deposits the rest in your account in the settlement.
Many businesses record sales at their gross amount and then forget the fees, so a difference appears in the reconciliation. Record the fee as an expense, and its VAT as input VAT if it is on a valid tax invoice.
Worked example
A restaurant sold 100,000 SAR through POS terminals during the month, and the fee (we assume 0.8% for illustration only) carries 15% VAT.
Fee = 100,000 × 0.8%800
VAT on the fee = 800 × 15%120
Total deducted = 800 + 120920
Net deposited = 100,000 − 92099,080 SAR
Formula: Card sales − (fee + its VAT)
Don't confuse it with
Bank chargesPOS fees are tied to sales and change with them, while other bank charges are fees for account services.