How to reconcile payment gateway payouts in the UAE without losing fees or VAT

A gateway collects card payments, waits a settlement period, deducts its fees and any refunds or chargebacks, and pays the net amount to your bank. One payout can cover hundreds of orders across several days. The bank statement shows only the net figure.

The settlement report from the gateway is the bridge. It lists each transaction included in a payout, the gross amount, the fee, any VAT on the fee and the net. Download it for every payout; it is your source document.

Treat the gateway like a bank account that holds your money for a few days. Record each sale as normal, with the customer receipt going to a “gateway clearing” account instead of the bank. When the payout lands, move the net amount from clearing to the bank, and post fees, VAT on fees and refunds from clearing as separate lines. If everything is recorded, the clearing account returns to zero, or to the amount of sales not yet paid out.

Our view: any business with more than a handful of card or online payments a week should run a clearing account per gateway. It is the only reliable way to know the fees you actually pay.

Orders paid by card from 1 to 7 October: AED 48,300 including VAT. One refund: AED 1,050. Gateway fees on the gross: AED 1,352.40, plus VAT on the fees of AED 67.62. Net payout on 10 October: 48,300 − 1,050 − 1,352.40 − 67.62 = AED 45,829.98.

Sales are recorded as orders occur, AED 48,300 into gateway clearing. On payout: debit bank AED 45,829.98; debit payment processing fees AED 1,352.40; debit VAT input AED 67.62; debit refunds (or the credit note against the customer) AED 1,050; credit gateway clearing AED 48,300. Clearing returns to zero for that week.

• Gross sales from your store or invoices, not from the payout
• Fees and VAT on fees from the settlement report
• Refunds matched to credit notes
• Chargebacks recorded as a receivable or loss, with the dispute evidence attached

Gateway charges are explicit fees for a payment service. Under Article 42 of the VAT Executive Regulation, financial services charged through an explicit fee or commission are generally taxable, so UAE gateways commonly charge 5% VAT on their fees. Collect the gateway’s monthly tax invoice; without it, the input VAT on fees cannot be recovered.

Gateways based outside the UAE may not charge UAE VAT, in which case the reverse charge may apply to the fees you pay. Check each provider’s invoices with your accountant, because the treatment changes the VAT return.

Some gateways hold back a percentage of payouts as a rolling reserve, released months later. That money is still yours: move it to a “gateway reserve” receivable rather than treating it as a fee. Chargebacks, where a cardholder disputes a payment, reduce a payout and may come with a fee. Record the disputed amount as a receivable while you contest it, and write it off only if you lose.

HelloBooks has no direct integration with UAE payment gateways or POS systems, so the reconciliation uses general tools: a clearing account per gateway, the bank statement upload and the gateway’s settlement report as an attachment. The AI agent reads the report, proposes the payout entry with fees, VAT and refunds split out, and matches the net amount on the bank statement.

You approve the entry. Ask “what did gateway fees cost us as a percentage of card sales last quarter?” and the agent answers from the fee and sales accounts. If you need a custom clearing report or AI categorisation rules for your gateway’s report format, contact the team at hello@hellobooks.ai.