GST & Tax · Edmonton
Your Square deposits don't match your sales. Here's why.
The number in your Square dashboard and the number that lands in your bank are almost never the same. That's normal. Here's what's in the gap and how to book it correctly.
By the Plum team- Updated Oct 2026
- 7 min read
- Square pays you the net amount: sales plus GST and tips, minus fees and refunds.
- Payouts follow Square's schedule, so one deposit rarely equals one day's sales.
- Never record the deposit as income. Record gross sales, fees, tips and GST separately.
- Reconcile using Square's transfer report, one payout at a time.
It's one of the most common questions we hear from salons, barbers, studios and shops: "Why don't my Square deposits match my sales?" Your Square dashboard says you sold $2,400 on Saturday, but your bank shows $2,281.17 on Monday, and Tuesday's deposit looks like it covers two days at once.
Nothing's broken. Square deposits are a net number, and the gap is made up of a handful of predictable pieces. Once you know what they are, you can reconcile any payout in a few minutes. Here's the breakdown, written for businesses in Edmonton, Sherwood Park, St. Albert and beyond.
1Why Square deposits don't match sales
1. Processing fees come off first
Square deducts its card processing fee from every transaction before paying you. You never see the fee as a separate withdrawal, which is why it's easy to forget it exists. Over a year those fees add up to a meaningful expense you're entitled to deduct.
2. Tips are mixed in
Card tips are paid out with your sales. If you pass tips on to staff through payroll or in cash, the deposit includes money that isn't yours to keep. If you're a solo stylist, the tips are your income.
3. Refunds and chargebacks
Refunds issued today come out of today's payout, even if the original sale was last month. Disputed card payments (chargebacks) can also be held back or deducted.
4. GST is inside the deposit
If you're registered and charge 5% GST at checkout, that GST is included in what Square pays you. It belongs to CRA. Counting it as sales overstates your income.
5. Timing
Square bundles sales into payouts on its own schedule. Weekend and holiday sales often arrive together, and sales near the end of the day can fall into the next payout. Instant transfers, if you use them, carry an extra fee and land on a different schedule.
6. Cash, gift cards and other payment types
Cash sales you ring through Square show up in your sales report but go in your till, not your bank via Square. Gift card redemptions and other tenders also change what gets paid out compared to what was "sold."
2One payout, broken down
Say you're a barber in Bonnie Doon. Here's how a single payout might break down. The fee amount is illustrative; your actual rate depends on your Square plan and card types.
| Line | Amount | Where it goes in your books |
|---|---|---|
| Service sales (before GST) | $2,000.00 | Sales income |
| GST collected (5%) | $100.00 | GST payable |
| Card tips | $300.00 | Tips payable to staff, or income if solo |
| Refund to a client | −$52.50 | Reduces sales and GST |
| Square processing fees | −$66.33 | Merchant fees expense |
| Deposit to bank | $2,281.17 | Matches the bank line |
Record only the $2,281.17 as "sales" and you've overstated income by the GST and maybe the tips, and missed $66.33 in deductible fees. Multiply by 52 weeks and it's a real problem at tax time.
3How to reconcile Square payouts, step by step
Square integrations with QuickBooks Online and Xero can automate a lot of this, but they need to be set up carefully. A poorly configured integration can double-count sales (once from the app and once from the bank feed) or dump everything into one income account.
4Getting GST right with Square
For GST-registered businesses, Square is often where GST mistakes start. A few things to watch:
- Tax settings per item. Make sure 5% GST is applied to taxable items only. Some health services, for example, are GST-exempt and shouldn't have it added.
- Voluntary tips generally aren't subject to GST, so they shouldn't be inflating your GST collected.
- Refunds reverse GST too. When you refund a sale, the GST on it comes back off what you owe.
- Processing fees usually carry no GST. Card processing is generally treated as an exempt financial service, so there's normally no input tax credit to claim on Square's fees.
- Match your return to Square's report. Before filing, compare GST collected in your books with Square's sales tax summary for the same period.
If those two numbers don't agree, find out why before you file. It's much easier than amending a return later.
What about Stripe, PayPal and booking apps?
Everything above applies to almost any payment processor. Stripe, PayPal, Shopify Payments and most booking apps pay you a net amount after fees and refunds, on their own schedule. The fix is the same: record the gross, book the fees, and use a clearing account for each processor.
When the gap is a real problem
Most differences between sales and deposits are explained by the items above. But if your reconciliation leaves a gap you can't explain, take a closer look. A missing payout, a chargeback you didn't know about, a refund issued by mistake or a sale rung up at the wrong price will all show up here first. That's one more reason to reconcile monthly: small gaps are easy to trace while the month is still fresh.
5The setup that makes this painless
- Use a Square clearing account. Sales, tips, GST and fees all post to it; the bank deposit clears it to zero. A non-zero balance tells you exactly where to look.
- Separate income accounts for services and retail products, so you can see what's actually driving revenue.
- Turn on GST correctly in Square and apply it only to taxable items. Our guide on GST registration covers when you need to start charging it.
- Reconcile monthly, not yearly. Twelve small reconciliations beat one enormous one in April.
If you run a salon or barbershop, our guide to salon bookkeeping in Edmonton goes deeper on tips, chair rentals and product sales.
Plum sets up and reconciles Square, Stripe and booking-app payouts for businesses across Edmonton, Leduc and Spruce Grove, and if you're months behind, we can catch you up first. Book a call and bring your latest Square report.
6Questions people ask
Why is my Square deposit less than my sales?
Square takes its processing fees before paying you, and refunds, chargebacks and any instant-transfer fees come out of the payout too. Cash sales also show in your Square sales report but never reach your bank through Square.
Should I record Square deposits as income?
No. Record your gross sales as income, Square's fees as an expense, tips as owed to staff where that applies, and GST as a liability. The deposit is just the net of all of those.
Do Square fees have GST on them?
Card processing fees are generally treated as financial services, which are GST-exempt, so there's usually no GST to claim back on them. Check your Square fee statements or ask your accountant if you're unsure.
Why does one Square deposit cover two days of sales?
Payouts follow Square's transfer schedule, not your business day. Weekend sales are often combined into one deposit, and sales late in the day can land in the next payout.
Is GST included in my Square deposits?
Yes. If you charge GST at checkout, it's inside the money Square pays you. It belongs to CRA, so it needs to be recorded as GST payable, not income.
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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.