---
title: "Bookkeeping for Etsy sellers in QuickBooks | Ledgerbrook"
source: https://ledgerbrook.com/blog/etsy-bookkeeping/
description: "Bookkeeping for Etsy sellers in QuickBooks Online: sales, every fee type, ads, sales tax and materials, tied to the 1099-K."
---

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# Bookkeeping for Etsy sellers in QuickBooks

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[Omkar Moraye](/about/) · October 25, 2026

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## How do you do bookkeeping for an Etsy shop?

Etsy deposits net of a $0.20 listing fee, a 6.5% transaction fee, 3% plus 25 cents processing and ad fees, and it remits US sales tax itself. Bookkeeping for an Etsy shop records gross sales from the monthly statement, books each fee as its own expense, leaves remitted tax out of income and tracks materials as cost of goods sold.

Bookkeeping for Etsy sellers starts with a number that never shows up in the bank: what buyers actually paid. A shop that made $5,120.00 of sales and shipping in November sees four deposits that add up to $4,097.00, because Etsy has already taken listing fees, transaction fees, processing, ads, shipping labels and a subscription, and kept the sales tax to pay the states. Book the deposits as sales and the profit and loss is short by every one of those, and the 1099-K in January will not agree with anything in it.

This post works one month of an Etsy shop into QuickBooks Online from Etsy’s own statement: each fee type and the account it goes to, the entry, the month-end check, materials and cost of goods sold, and when Intuit’s Etsy apps or a spreadsheet are the better tool. It is the Etsy page in our [ecommerce bookkeeping](/industries/ecommerce/) series, and it continues the shop worked through on that page for October.

## Why an Etsy deposit is not your sales

Etsy keeps every shop’s money in a payment account first. Etsy calls it “a notional ledger that allows sellers to track payment amounts, refunds, and fees,” and deducts its fees from that balance as they happen ([Etsy Payments Policy](https://www.etsy.com/legal/etsy-payments/), last updated July 31, 2026, read October 25, 2026). What reaches the bank is whatever is left on the deposit date, on a schedule the seller picks: daily, weekly, every two weeks or monthly.

So a deposit is a slice of a running balance, not a batch of orders. It does not line up with any sale, any week of sales, or any fee. Three things follow for the books:

- Sales have to come from Etsy’s records, at what the buyer paid, not from the bank.
- Fees are expenses, and each kind goes to its own account.
- Sales tax Etsy collected is not the shop’s income or the shop’s debt. Etsy “will calculate, collect and remit sales tax on your behalf for orders delivered to customers residing in US locations.”

Etsy deposits booked as sales, with no fees anywhere?

That is a cleanup, not a one-off fix: $99 per month of backlog (20% off 6+ months), one fixed price agreed before any work starts. [Send the file for a free 48-hour review](/contact/?from=blog%2Fetsy-bookkeeping).

## Etsy fees and the QuickBooks account for each

These are Etsy’s US terms from its Fees & Payments Policy, last updated October 5, 2026, and its Payments Policy, both read October 25, 2026 ([Etsy fees](https://www.etsy.com/legal/fees/)). Fees change, so check the policy pages for the period you are booking.

| Etsy fee | Etsy’s US terms | QuickBooks Online account |
| --- | --- | --- |
| Listing fee | $0.20 per listing; listings expire after four months and auto-renew at $0.20 unless set to manual; a multi-quantity listing renews at $0.20 each time one sells | `Marketplace Fees` |
| Transaction fee | 6.5% of the item price plus what you charge for delivery and gift wrap; for US sellers it “will not apply to sales tax” | `Marketplace Fees` |
| Payment processing | 3% plus $0.25 per order in the US, “assessed on the total amount of the sale, including tax and postage” | `Merchant Service Fees` |
| Etsy Ads | Up to the daily budget you set | `Advertising` |
| Offsite Ads | 15% of an attributed order, or 12% once the shop has made $10,000 in sales over the prior 365 days, and 12% for life after that; never more than $100 per order | `Advertising` |
| Shipping labels | The carrier’s price for each label bought on Etsy, plus any insurance or signature | `Shipping and Delivery` |
| Etsy Plus | $10 a month, with 15 listing credits shown as $3 and $5 of Etsy Ads credit each cycle | `Software and Subscriptions` |
| Pattern | $15 a month after a 30-day trial | `Software and Subscriptions` |
| Currency conversion | 2.5% when you list in a currency other than your payment account’s | `Merchant Service Fees` |
| Instant transfer | Shown at the time of transfer, for eligible US sellers | `Merchant Service Fees` |
| Square reader sales | No Etsy transaction or processing fee; $0.20 “Square manual” fee on listings not synced with Square | `Marketplace Fees`; Square’s own fees are separate |
| Sales tax Etsy remits | Collected from the buyer and deducted from your balance | Not an expense and not income |

Etsy may also charge sales tax on some of its fees, depending on the seller’s location. That tax is part of the cost of the fee and goes to the same account as the fee.

Two of those rows explain most of the “why is Etsy charging me” questions. The $10 a month is Etsy Plus, which a seller opts into and can cancel under **Settings**, then **Your Subscription**. And Offsite Ads is not optional for a shop past $10,000 in a year: Etsy says a shop that reaches the threshold “will be required to participate” from then on.

### How much does Etsy take from a $100 sale?

On a $100.00 item with free shipping, sold to a buyer who pays $8.00 of sales tax, Etsy keeps $6.50 of transaction fee (6.5% of $100.00), $3.49 of processing (3% of $108.00 plus $0.25), and the $0.20 the listing cost. That is $10.19, and the seller’s balance rises by $89.81. The $8.00 of tax goes to the state and never reaches the seller’s balance. An Offsite Ads sale would cost another $12.00 or $15.00, and any Etsy Ads spend is on top.

## A month of an Etsy shop, worked

The shop from the [October example](/industries/ecommerce/) ended that month with $307.00 still in its Etsy payment account. In November it takes 95 orders and deposits weekly, every Tuesday. Etsy’s monthly statement, which Etsy says “will detail all sales and fees activity from the preceding month,” lists the month’s activity. It does not show balances; Intuit notes that Etsy’s statements “do not have beginning and ending balances.” The opening and closing lines below are carried forward from the books, and the activity between them is the statement’s:

| Etsy payment account, November | Amount |
| --- | --- |
| Opening balance, November 1 | 307.00 |
| Item sales | 4,600.00 |
| Shipping charged to buyers | 520.00 |
| Transaction fees, 6.5% of $5,120.00 | −332.80 |
| Payment processing, 3% of $5,480.00 plus 25 cents on 95 orders | −188.15 |
| Listing and renewal fees, 150 at $0.20 | −30.00 |
| Etsy Ads | −75.00 |
| Offsite Ads, 12% of two attributed orders totaling $180.00 (the shop passed $10,000 of sales in its prior 365 days) | −21.60 |
| Shipping labels | −310.00 |
| Etsy Plus | −10.00 |
| Deposits to the bank, Nov 3, 10, 17 and 24 | −4,097.00 |
| **Closing balance, November 30** | **362.45** |

Buyers also paid $360.00 of sales tax on these orders. The statement shows it under “Sales tax paid by buyer (Remitted),” and Etsy deducted it from the balance as it collected it, so it nets to nothing and the table leaves it out. Processing is charged on the total including that tax, which is why it is figured on $5,480.00 rather than $5,120.00.

In QuickBooks Online, the month is one journal entry from the statement on November 30, plus the four deposits, each matched in the bank feed to the clearing account:

| Date | Account | Debit | Credit |
| --- | --- | --- | --- |
| Nov 3 | Business Checking | 1,021.30 | |
| Nov 3 | Etsy Clearing | | 1,021.30 |
| Nov 10 | Business Checking | 987.65 | |
| Nov 10 | Etsy Clearing | | 987.65 |
| Nov 17 | Business Checking | 1,104.20 | |
| Nov 17 | Etsy Clearing | | 1,104.20 |
| Nov 24 | Business Checking | 983.85 | |
| Nov 24 | Etsy Clearing | | 983.85 |
| Nov 30 | Etsy Clearing | 5,120.00 | |
| Nov 30 | Sales | | 4,600.00 |
| Nov 30 | Shipping Income | | 520.00 |
| Nov 30 | Marketplace Fees | 362.80 | |
| Nov 30 | Merchant Service Fees | 188.15 | |
| Nov 30 | Advertising | 96.60 | |
| Nov 30 | Shipping and Delivery | 310.00 | |
| Nov 30 | Software and Subscriptions | 10.00 | |
| Nov 30 | Etsy Clearing | | 967.55 |

`Marketplace Fees` is the $332.80 of transaction fees plus the $30.00 of listings, and `Advertising` is the $75.00 of Etsy Ads plus the $21.60 of Offsite Ads.

### The month-end check

`Etsy Clearing` opened November at $307.00, took in $5,120.00, gave out $967.55 of fees and $4,097.00 of deposits, and closes at $362.45. Two checks prove the month. The clearing account’s November activity should equal the statement’s, line type by line type. And $362.45 should equal the balance Etsy’s payment account shows on November 30, so note or screenshot that balance on the last day of the month, because the statement will not show it later. When either differs, the usual causes are a deposit coded to Sales instead of `Etsy Clearing`, a refund or fee credit in the payment account with no line in the books, a label charged to the card on file rather than the balance, or a week entered twice.

The last cause on that list is worth knowing. If the balance cannot cover a fee, Etsy says the seller must pay it “within 15 days of the date of your monthly statement,” and a seller enrolled in AutoBilling has it charged to the card on file. That charge shows up on the credit card feed, not the Etsy statement’s deposits, and it belongs to `Etsy Clearing` too, because it pays down what the shop owed Etsy.

### Refunds

A refund reduces the Etsy balance by what the buyer gets back. Record the item and shipping refunded in `Sales Returns and Allowances` with a credit to `Etsy Clearing`, and any fee credit Etsy gives back as a credit to the fee account it came from. Take the amounts from the payment account activity or the sold orders download, not the monthly statement: Intuit’s comparison table says Etsy’s monthly statement “excludes refunds,” while the QuickBooks profit and loss includes them.

### Tying the year to the 1099-K

Etsy’s 1099-K reports gross sales including shipping, before fees and refunds, and leaves out the sales tax Etsy remitted. With the entry above, November adds $5,120.00 to `Sales` plus `Shipping Income`, the same base Etsy uses. Because refunds sit in their own account, those two accounts for the year should equal the form; the refunds are the expected difference between the form and net sales. How every platform builds its figure, and the federal and state thresholds, are in [why your 1099-K doesn’t match your books](/blog/1099-k-and-your-books/).

## Materials and cost of goods sold

Most Etsy shops make what they sell, so their inventory is mostly materials: yarn, clay, fabric, beads, blanks, packaging that ships with the product. Bought in bulk, materials are an asset until they are used, so book purchases to `Inventory Asset`, not to an expense. Each month, or each quarter for a small shop, count what is left and move the rest to `Cost of Goods Sold`.

> **Cost of Goods Sold** = Beginning materials + Materials bought − Ending materials

For the same shop in November:

- Materials on hand, November 1: $1,850.00
- Materials bought in November: $900.00
- Materials on hand from the November 30 count: $1,700.00
- **Cost of Goods Sold for November: $1,050.00**

Against $4,600.00 of item sales, that is a 77% gross margin before Etsy’s fees, and about 56% after the $967.55 of fees and labels. Without the count, the $900.00 of purchases would have been November’s cost of goods, and the margin would move with the buying calendar instead of the selling one. Finished goods bought for resale, such as vintage stock, follow the same rule. The entry for a count adjustment, and the IRC §471(c) option for small businesses, are in [journal entry for inventory](/blog/journal-entry-for-inventory/).

## Getting Etsy into QuickBooks: statement, app or spreadsheet

| Method | What it does | Fits | Watch for |
| --- | --- | --- | --- |
| Monthly journal entry from Etsy’s statement | One entry a month, as above | Most single-channel shops; a few hundred orders a month or fewer | Download the statement every month, even quiet ones |
| Sync with Etsy (Intuit) | Sales as sales receipts, refunds as refund receipts, each fee as an expense, deposits as transfers | Shops that want every transaction in QuickBooks without typing | Product and buyer detail is not imported; the start date can duplicate past entries |
| Etsy Connector by Intuit | Each Etsy order as an invoice or sales receipt, with items | Shops that need item-level sales or inventoried items in QuickBooks | Sales receipts import only once fully paid; up to one year of history |
| Payout summary apps (A2X, Link My Books and others) | One summarized entry per deposit or period | Shops selling on Etsy and other channels | The account mapping is set once, so check it against one statement |
| Spreadsheet | A ledger of sales, fees and expenses, outside any accounting file | A new shop, or a hobby testing whether it sells | It stops being enough sooner than most sellers think; see below |

Intuit’s two apps are installed from **Integrations**, then **Find integrations**. Sync with Etsy reads the Etsy payment account, so it sets up a bank account in QuickBooks named after the shop (“Etsy <Name of your shop>”) rather than a clearing account; the effect is the same, and that account should be reconciled to Etsy’s statement each month. Intuit’s article says sales tax Etsy collected goes to an account called “Etsy Shop Sales Tax Clearing,” that the app uses “the same name, ‘Etsy: Product Sales,’ for all your products” with Etsy Inc. as the customer on every sale, that the import can reach back to January 1 of the previous calendar year, and that after the first import it checks Etsy “at least once every three hours” ([Intuit: Sync with Etsy](https://quickbooks.intuit.com/learn-support/en-us/help-article/import-transactions/import-transactions-etsy-shop-quickbooks-online/L9G9ONJ5H_US_en_US), read October 25, 2026). The Etsy Connector works from orders instead: it can create items as inventoried, matched by SKU or name, and “you can import up to 1 year worth of historical orders” ([Intuit: Etsy Connector](https://quickbooks.intuit.com/learn-support/en-us/help-article/direct-feeds/connect-manage-etsy-transactions-quickbooks-online/L9LzDru77_US_en_US)).

Pick one. A sync app running while someone also posts the monthly statement entry counts every sale twice.

### When a spreadsheet stops being enough

A spreadsheet works while the shop has one channel, no inventory worth counting, and no one but the owner reading the numbers. It stops working at the first of these:

- **A second sales channel,** such as a Shopify store, a market stall or wholesale orders, because the sales tax rules and the clearing balances differ by channel.
- **Stock or materials worth counting,** because a spreadsheet cannot keep an inventory balance and a cost of goods figure that agree with each other.
- **Sales tax of your own** to file, from a site or in-person sales Etsy does not cover.
- **A lender, landlord or partner** who asks for a balance sheet, or a CPA who asks for a trial balance.
- **Hiring help,** whether a contractor or an employee, because 1099 and payroll records need a ledger behind them.

## Is an Etsy shop a hobby or a business?

For federal income tax, the line is whether the activity is carried on for profit. The IRS weighs nine factors under Treas. Reg. §1.183-2(b), including whether it is run in a businesslike way with complete records, the time and effort put in, and the history of income or losses, and under IRC §183(d) an activity that shows a profit in 3 of 5 consecutive years is presumed to be for profit. The difference matters: hobby income still has to be reported, but the IRS says hobby expenses are miscellaneous itemized deductions that can no longer be deducted ([IRS Publication 17, 2025](https://www.irs.gov/publications/p17)), while a business deducts its costs, on Schedule C for a sole proprietorship or a single-member LLC owned by an individual. Where a shop falls is a question for your tax preparer. Keeping books like the ones above is one of the factors that points to a business.

## Common questions about Etsy bookkeeping

### Do you get a 1099 from Etsy?

Etsy issues Form 1099-K to US sellers who meet the federal or state reporting threshold. All Etsy income is reportable whether or not a form arrives. The thresholds are in [why your 1099-K doesn’t match your books](/blog/1099-k-and-your-books/).

### Do I have to pay sales tax if I sell on Etsy?

Not on orders Etsy collects for, which is US-bound orders in the states on its list. You do on sales Etsy does not handle, such as your own website or in person. Which platforms collect, and how to book each case, is in [does Etsy, eBay or Shopify collect sales tax?](/blog/marketplace-sales-tax/)

### Can QuickBooks Online connect to Etsy?

Yes, through Intuit’s Sync with Etsy app or the Etsy Connector by Intuit, both compared above, or through a third-party summary app. A monthly entry from Etsy’s statement needs no connection at all.

### What is the best way to track Etsy expenses?

Keep the fees Etsy deducts in the monthly statement entry, and everything paid outside Etsy (materials, packaging, equipment, software) on a business card or account in the bank feed, coded as it comes in. The two never overlap, so nothing is counted twice and nothing is missed.

## What monthly Etsy bookkeeping costs

A shop whose deposits were booked as sales for a year needs every monthly statement pulled, each month entered at gross through `Etsy Clearing`, and materials rebuilt from purchase records and a count. That is a [cleanup](/quickbooks-cleanup/), priced per month of backlog.

$99per month of backlog20% off 6+ months

After that, a [monthly close](/monthly-bookkeeping/) books the Etsy statement and every other channel at gross, ties `Etsy Clearing` to Etsy’s balance, records materials and cost of goods sold, and reconciles every account by the 5th business day. That is $99 a month (up to 3 accounts, up to 200 transactions a month), and full pricing is on the [pricing page](/pricing/).

> **When to hand this off:** if Etsy deposits went straight to Sales for more than a few months, or the shop also sells on another channel, the statements have to be rebuilt month by month before the books tie to Etsy’s balance and the 1099-K. A [free file review](/contact/?from=blog%2Fetsy-bookkeeping) counts the months first.

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 Previous BlogOctober 25, 2026

### Amazon seller bookkeeping: settlements and FBA

Amazon seller bookkeeping in QuickBooks Online: settlement reports, referral and FBA fees, refunds, reserves and inventory.

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](/blog/amazon-seller-bookkeeping/)[

Next Blog October 25, 2026

### Does Etsy, eBay or Shopify collect sales tax?

Does Shopify collect sales tax? Which platforms collect and remit it, what you still file, and how to book each case.

Read next post →

](/blog/marketplace-sales-tax/)