Freelancers & Online · Edmonton
Shopify bookkeeping in Canada, payout by payout.
Shopify makes selling easy and bookkeeping confusing. Here's how Canadian store owners can turn net payouts, provincial sales tax and inventory into books that actually make sense.
By the Plum team- Updated Oct 2026
- 8 min read
- Shopify deposits are net. Record gross sales, tax, refunds and fees separately.
- Use a clearing account so every payout reconciles.
- Charge GST or HST based on where you ship, once you're registered.
- Track inventory and cost of goods sold, not just purchases.
- Gift cards are a liability until they're redeemed.
Shopify is great at selling and terrible at telling you whether you made money. Your bank sees one deposit every few days, net of fees, refunds and chargebacks, while your Shopify dashboard shows gross sales. Good Shopify bookkeeping in Canada bridges those two views so your revenue, sales tax and profit are all correct.
This guide is for Canadian store owners, from candle makers in Sherwood Park to apparel brands working out of St. Albert or a warehouse unit in south Edmonton.
1Why your deposits don't match your sales
Every Shopify Payments payout bundles several things together:
- Gross product and shipping sales
- GST or HST you collected
- Minus refunds issued to customers
- Minus Shopify Payments processing fees
- Minus chargebacks, and sometimes plus reversed chargebacks
Subscription and app fees are usually billed separately to your card. Other gateways, like PayPal, pay out on their own schedule. If you only record the deposits as "sales", your revenue is understated, your fees are invisible and your GST return won't match your actual sales.
2Shopify bookkeeping in Canada: the clearing account method
The cleanest approach is a Shopify clearing account, a bank-type account in your books that represents money sitting at Shopify. Each payout is recorded in full against it, and the deposit to your real bank moves the money out. When everything is right, the clearing account returns to zero.
Here's a worked example. Say one payout covered $2,000 of sales to Alberta customers with $100 GST, one $100 refund (plus its $5 GST), and $64 of processing fees. The payout was $1,931.
| Account | Debit | Credit |
|---|---|---|
| Bank (net deposit) | $1,931.00 | |
| Sales returns and refunds | $100.00 | |
| GST payable (refunded GST) | $5.00 | |
| Merchant and processing fees | $64.00 | |
| Sales | $2,000.00 | |
| GST payable (collected) | $100.00 | |
| Total | $2,100.00 | $2,100.00 |
In practice you'd post the sales side to the clearing account and the deposit out of it, but the result is the same. Shopify's payout report gives you every number you need, and connector apps can post a summary for each payout automatically. Either way, your books show the real $2,000 of sales and the real $64 cost of getting paid.
3GST and HST for Canadian Shopify stores
The usual small supplier rule applies: register once your taxable sales pass $30,000 over four consecutive calendar quarters, or in a single quarter. Many online sellers register earlier so they can claim GST on inventory and equipment. Our GST registration guide explains the test.
Once registered, where you ship matters more than where you are:
| Shipped to | What you generally charge |
|---|---|
| Alberta, and other GST-only provinces and territories | 5% GST |
| HST provinces such as Ontario | That province's HST rate (13% in Ontario) |
| BC, Saskatchewan, Manitoba, Quebec | 5% GST, plus provincial sales tax only if you're registered there |
| Outside Canada | Generally zero-rated: no GST |
Shopify can calculate tax by province automatically, but only if your tax settings and registration numbers are set up properly. Review them after you register, and again if you start growing in a province with its own sales tax. BC, Saskatchewan, Manitoba and Quebec each have registration rules for out-of-province online sellers once sales there reach certain levels. If you sell a lot into a single US state, ask about US sales tax too.
4Inventory and cost of goods sold
If you sell physical products, your profit depends on cost of goods sold, not on what you bought this year. Buying $20,000 of stock in November doesn't make November a $20,000 loss; it creates inventory, an asset, which becomes an expense as it sells.
At a minimum, count your stock at your year end and value it at cost. Shopify's inventory reports help, but they don't always include freight, duties and packaging, which are part of your product cost. Our guide to inventory and cost of goods sold walks through the calculation with numbers.
Other Shopify bookkeeping details
- Gift cards are a liability when sold and become revenue when redeemed. GST is generally charged at redemption.
- Discounts reduce the sale price, and GST is charged on the discounted amount.
- Shipping you charge is revenue, and it's generally taxed at the same rate as the products shipped.
- Shipping you pay to carriers is a cost. Many sellers include it in cost of goods sold.
- Chargebacks reduce revenue; the chargeback fee is an expense.
Expenses Shopify sellers often miss
- Shipping labels bought through Shopify. They're charged on your Shopify bill, not taken from payouts, so record them from the bill.
- App subscriptions for reviews, email, upsells and inventory tools
- Domain, email and design costs
- Product photography and samples
- Packaging and inserts: mailers, tissue, thank-you cards
- Advertising on social platforms and search
- Workspace, whether a home office that meets CRA's tests or a rented storage unit
Each of these reduces your taxable profit, and the GST on many of them can come back as input tax credits once you're registered.
5A monthly Shopify bookkeeping routine
6Common Shopify bookkeeping mistakes
Recording deposits as sales. Your revenue, fees and GST are all wrong as a result.
Charging 5% everywhere. Once you're registered, sales shipped to HST provinces need HST.
Expensing inventory when you buy it. Your profit swings wildly and your tax bill is wrong in both directions.
Ignoring PayPal. A second gateway is easy to forget, and its sales still count toward GST and income.
Mixing personal purchases. Using the business card for personal shopping makes every reconciliation harder.
Plum works with online sellers across Edmonton, Sherwood Park and St. Albert, and with Canadian Shopify stores remotely on flat monthly fees. If your payouts and your books haven't matched in months, book a free 15-minute call and we'll get them lined up.
7Questions people ask
How do I record Shopify payouts in my books?
Record each payout at gross: the full sales, the GST or HST collected, refunds, and Shopify's fees, with the net amount matching your bank deposit. Many sellers use a clearing account so every payout can be reconciled to Shopify's payout report.
Do I charge GST or HST on Shopify sales to other provinces?
If you're GST-registered and ship physical goods, you generally charge the rate of the province you ship to: 5% GST to Alberta and other GST-only provinces, and the higher HST rate to HST provinces like Ontario. Provincial sales taxes in BC, Saskatchewan, Manitoba and Quebec have their own registration rules.
Do Canadian Shopify sellers charge GST on sales to the US?
Physical goods shipped outside Canada are generally zero-rated, so no GST is charged. US states may have their own sales tax rules once your sales there reach certain levels, so check if you sell a lot into one state.
Are Shopify fees tax deductible?
Yes. Subscription fees, app charges, transaction and payment processing fees are business expenses. Subscription and app charges usually include GST you can claim back if you're registered; payment processing fees generally don't carry GST.
Is selling a gift card on Shopify revenue?
Not yet. A gift card is a liability until it's redeemed, and GST is generally charged when the customer uses it to buy something, not when the card is sold.
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Book a free 15-min callThis article is general information for Alberta businesses and isn't tax or legal advice. Rules and thresholds change, so confirm your situation with your accountant or CRA.