Amazon FBA Accounting Canada — CPA Guide (2026)

Amazon FBA accounting in Canada is significantly more complex than standard small business bookkeeping. Every two weeks, Amazon deposits a single settlement payment into your bank account. That deposit is the net result of dozens of line items: product sales, shipping credits, gift wrap charges, promotional rebates, referral fees, FBA fulfilment fees, storage fees, advertising costs, refunds, and reimbursements. If your bookkeeper records that net deposit as revenue, your financial statements are wrong from the first entry. This guide breaks down exactly how to handle Amazon FBA accounting as a Canadian seller, from reading settlement reports to automating your reconciliation and staying compliant with the CRA.

At LedgerLogic, we use this workflow with our e-commerce accounting clients who sell on Amazon.ca and Amazon.com. It is the same approach we outline in our comprehensive e-commerce accounting guide for Canadian sellers.

Affiliate Disclosure: LedgerLogic is an A2X and Synder partner. We may earn a commission if you sign up through our links at no extra cost to you. We only recommend tools we use with our own clients.

Why Amazon FBA Accounting Is Harder Than Standard Bookkeeping

Standard bookkeeping assumes a fairly clean relationship between revenue, expenses, and bank transactions. Amazon FBA breaks every one of those assumptions. Understanding why is the first step toward getting your books right.

Settlement reports bundle 15+ line items into one deposit. An Amazon settlement report is not a simple sales summary. It includes product charges, product charge tax, shipping credits, shipping credit tax, gift wrap credits, promotional rebates, marketplace facilitator tax, selling fees, FBA fulfilment fees, storage fees, long-term storage fees, removal fees, advertising costs, refunds (broken into product refund, shipping refund, and fee refund), and reimbursements for lost or damaged inventory. All of these net together into the single amount that arrives in your bank account. Recording that deposit as "Amazon sales" ignores the true composition of your revenue and expenses.

FBA fees are complex and multi-layered. Amazon charges you on multiple dimensions simultaneously. Referral fees are a percentage of the selling price. Fulfilment fees depend on the size and weight of each unit. Monthly storage fees are based on cubic feet of warehouse space consumed. Long-term storage fees apply to units sitting in Amazon's fulfilment centres for more than 365 days. Removal and disposal fees apply when you pull inventory out. Each of these needs to be tracked in the correct expense account in your chart of accounts.

Reimbursements create additional accounting entries. When Amazon loses or damages your inventory in their fulfilment centres, they issue reimbursements. These are not revenue — they are compensation for inventory loss. They need to be recorded separately as other income or offset against your inventory write-off, depending on your accounting treatment. If you are not tracking reimbursements, you may be leaving money on the table or misstating your income.

Multi-marketplace sellers face currency complexity. If you sell on both Amazon.ca and Amazon.com (and many Canadian sellers do), you are dealing with two currencies, two sets of settlement reports, and potentially two sets of tax obligations. Your accounting software must handle multi-currency transactions, and your reconciliation process doubles in complexity. This is one of the primary reasons we recommend Xero for e-commerce sellers — its multi-currency support is built into the platform rather than bolted on as an afterthought.

Understanding Amazon Settlement Reports

The Amazon settlement report is your primary source document for accounting. It is generated at the end of each settlement period (typically every 14 days) and details every financial transaction that contributed to your deposit or charge. Here is what each major line item means and how it maps to your chart of accounts.

Product Sales (Product Charges). This is your gross revenue — the selling price of all units sold during the settlement period. In your chart of accounts, this maps to your sales revenue account. This figure is always higher than your bank deposit because Amazon deducts fees before paying you.

Shipping Credits. If you offer seller-fulfilled shipping (not FBA), Amazon passes shipping charges collected from customers to you. For FBA sellers, this is typically zero because Amazon handles fulfilment. When present, map this to a shipping revenue account.

Gift Wrap Credits. Revenue collected from customers for gift wrap services. Map to a separate gift wrap revenue account or combine with product sales if immaterial.

Promotional Rebates. Discounts funded by Amazon promotions (such as Lightning Deals or coupons). These appear as a negative line item and reduce your effective revenue. Map as contra-revenue in your chart of accounts.

Selling Fees (Referral Fees). Amazon's commission on each sale, typically 8% to 15% depending on the product category. This is a cost of doing business on Amazon and should map to a dedicated selling fees expense account.

FBA Fulfilment Fees. Per-unit fees for picking, packing, and shipping your products through Amazon's fulfilment network. These vary by product size and weight. Map to an FBA fulfilment fees expense account.

FBA Storage Fees (Monthly). Charged based on the daily average cubic feet of space your inventory occupies. Rates are higher during Q4 (October through December). Map to an FBA storage fees expense account.

FBA Long-Term Storage Fees. Surcharges applied to units stored for more than 365 days. These can be substantial and are a signal that you have slow-moving inventory. Map to the same storage fees account or a separate long-term storage account for visibility.

Removal and Disposal Fees. Charged when you request Amazon to return inventory to you or dispose of it. Map to an inventory removal expense account.

Advertising Costs. Spend on Amazon Sponsored Products, Sponsored Brands, or Sponsored Display campaigns. Amazon deducts PPC advertising costs directly from your settlements. Map to an advertising expense account.

Refunds. Settlement reports break refunds into multiple components: product refund, shipping refund, and restocking fee. Record refunds as contra-revenue (reducing your gross sales), not as an expense. Restocking fees retained by you should be recorded as fee income.

Reimbursements. Payments from Amazon for lost, damaged, or destroyed inventory in their fulfilment centres. Record as other income, not as sales revenue. This keeps your sales figures accurate while still capturing the income.

How to Reconcile Amazon FBA in Xero

The most reliable way to reconcile your Amazon FBA settlements is to use middleware that connects Amazon Seller Central to your accounting software. Here is the workflow we implement for every Amazon client at LedgerLogic.

Step 1 — Connect A2X for Amazon to Xero

A2X is the industry standard for Amazon-to-accounting-software integration. Although we link to our Shopify accounting apps page (A2X supports both Shopify and Amazon), the Amazon connector works identically. A2X reads each settlement report from your Seller Central account and creates a summary journal entry in Xero that breaks the net deposit into its component parts: gross sales, fees, refunds, reimbursements, and taxes.

Install A2X from a2xaccounting.com and connect it to both your Amazon Seller Central account and your Xero organisation. A2X supports Amazon.ca, Amazon.com, and other international marketplaces from a single account.

Step 2 — Map Accounts in A2X

A2X needs to know which Xero account each settlement line item maps to. Set up mappings for: product sales, shipping revenue, gift wrap revenue, promotional rebates (contra-revenue), referral fees, FBA fulfilment fees, storage fees, advertising costs, refunds, and reimbursements. If your chart of accounts is already structured for e-commerce, this step takes about 30 minutes. If not, configure the chart of accounts first.

Step 3 — Reconcile Settlements Against Bank Deposits

Once A2X posts journal entries, open Xero's bank reconciliation screen. Match each Amazon deposit in your bank feed to the corresponding A2X journal entry. If the amounts match, you are reconciled. If there is a discrepancy, check whether Amazon held back funds (they occasionally hold reserves for new sellers) or whether a settlement spans two bank deposits.

Alternative — Synder for Transaction-Level Detail

If you prefer per-transaction detail rather than settlement summaries, Synder is the alternative. Synder records each individual Amazon order as a separate transaction in Xero, giving you order-level visibility. The trade-off is a higher volume of transactions in Xero, which can slow down reconciliation for high-volume sellers. For most FBA sellers doing over 500 orders per month, A2X's summary approach is cleaner and faster.

Amazon FBA Fees Explained for Canadian Sellers

Understanding the full fee structure is essential for profitability analysis. Amazon's fees eat into your margins from multiple angles. Here is a breakdown of the major fee categories with typical ranges for Canadian sellers.

Fee Type	Typical Range	Basis
Referral Fee	8%–15%	Percentage of selling price, varies by category
FBA Fulfilment Fee	$3.00–$15.00+ per unit	Per unit, based on size tier and weight
Monthly Storage Fee (Jan–Sep)	$0.75–$2.40 per cubic foot	Based on cubic feet of space consumed
Monthly Storage Fee (Oct–Dec)	$1.20–$3.60 per cubic foot	Peak season surcharge (Q4)
Long-Term Storage Fee	$6.90 per cubic foot or $0.15 per unit	Whichever is greater, for units stored 365+ days
Removal/Disposal Fee	$0.50–$2.00 per unit	Per unit returned or disposed
Advertising (PPC)	Variable (cost-per-click)	Deducted from settlement based on ad spend
Professional Seller Plan	$29.99 CAD/month	Monthly subscription (not deducted from settlement)

For the most current fee schedule, check Amazon Seller Central's fee schedule for Canada. Fees change periodically, and Amazon often announces increases effective in Q1 of each year.

From an accounting perspective, each fee type should map to a separate expense account (or at minimum separate sub-accounts) so you can analyse where your margin is going. If 30% of your revenue is consumed by FBA fees but only 5% by advertising, that tells you a very different story than if the ratios were reversed.

COGS and Inventory for FBA Sellers

Cost of Goods Sold (COGS) is the number that determines your gross profit, and it is the number most Amazon sellers get wrong. For FBA sellers, COGS is not simply what you paid your supplier. It is the full landed cost of getting each unit into Amazon's fulfilment centre, ready for sale.

Calculating Landed Cost

Landed cost includes three components:

• Product cost — what you pay your supplier per unit (including any supplier shipping to their port or warehouse)
• Inbound shipping — the cost of transporting goods from your supplier to Amazon's fulfilment centre (sea freight, air freight, last-mile trucking, Amazon's inbound placement fees)
• Duties and brokerage — customs duties, brokerage fees, and any import taxes paid when goods enter Canada

If your product costs $5.00 per unit, inbound shipping works out to $1.50 per unit, and duties and brokerage add $0.75 per unit, your true landed cost is $7.25 per unit — not $5.00. Using $5.00 as your COGS understates your true cost by 31% and makes your business appear more profitable than it actually is. For a detailed walkthrough, see our e-commerce COGS calculation guide.

Inventory Valuation Methods

The CRA permits two primary inventory valuation methods for small businesses:

• FIFO (First In, First Out) — assumes the oldest inventory is sold first. This is the most common method and works well when your product cost is relatively stable across purchase orders.
• Weighted Average Cost — averages the cost of all units on hand after each new purchase. This smooths out cost fluctuations and is simpler to maintain when you have frequent purchase orders at varying prices.

Whichever method you choose, apply it consistently. Switching methods requires CRA approval and creates complications in your financial statements. Most of our e-commerce clients use weighted average cost because it is easier to maintain with frequent inventory purchases.

Shrinkage and Damaged Inventory Write-Offs

Amazon will occasionally lose, damage, or destroy your inventory in their fulfilment centres. When they do, you need to write off the affected units against your inventory account and record the Amazon reimbursement (if any) as other income. The difference between the write-off and the reimbursement is your actual shrinkage cost. Track this monthly — if shrinkage is consistently high, it may be worth investigating specific SKUs or shipments.

GST/HST for Amazon Canada Sellers

GST/HST for Amazon sellers in Canada has specific rules that differ from standard e-commerce. Here is what you need to know.

Amazon as marketplace facilitator. Since July 2021, Amazon is considered a marketplace facilitator for GST/HST purposes. This means Amazon is responsible for collecting and remitting GST/HST on sales made through Amazon.ca to Canadian customers. Amazon collects the tax at checkout, and it does not flow through your settlement — Amazon remits it directly to the CRA. For a complete breakdown of marketplace facilitator rules, see our e-commerce GST/HST guide.

You still report on your return. Even though Amazon collects and remits the tax on your behalf, you are still required to report these sales on your GST/HST return. The sales are reported as part of your total revenue, and the tax collected by Amazon is reported on a specific line. Your net tax payable on these sales is effectively zero because Amazon has already remitted it, but the reporting obligation remains. Failing to report correctly can trigger CRA review notices.

Amazon.com sales are zero-rated exports. If you sell on Amazon.com and ship from a Canadian fulfilment centre to a U.S. customer, those sales are zero-rated exports for GST/HST purposes. You charge 0% GST/HST, but you can still claim input tax credits on the Canadian expenses related to those sales. If Amazon ships from a U.S. fulfilment centre (which is common if you have inventory in U.S. FBA warehouses), U.S. sales tax rules apply, and Canadian GST/HST does not enter the picture at all.

Input tax credits. Regardless of marketplace facilitator rules, you can still claim input tax credits (ITCs) on your business expenses: Dext subscription, A2X subscription, professional services, home office expenses, and any other GST/HST-bearing Canadian purchases related to your Amazon business. See the CRA's platform economy GST/HST guidance for the official rules.

When to Hire an E-commerce CPA

Some Amazon FBA sellers can manage their own bookkeeping, particularly in the early stages. But the complexity of Amazon accounting escalates quickly, and there are clear signals that it is time to bring in professional help.

You sell on multiple marketplaces. If you are on Amazon.ca, Amazon.com, and possibly Shopify or eBay, the volume of settlement reports, currency conversions, and tax obligations becomes unmanageable without dedicated accounting support. Multi-marketplace sellers are the most common type of client we onboard for e-commerce accounting.

You deal with multiple currencies. CAD and USD at minimum, possibly GBP or EUR if you sell on European marketplaces. Multi-currency accounting requires proper foreign exchange gain/loss tracking, and errors compound over time.

Your revenue exceeds $100,000 per year. At this level, the cost of bookkeeping errors (incorrect COGS, missed ITCs, GST/HST filing mistakes) exceeds the cost of professional accounting. A single GST/HST reassessment can cost more than a year of bookkeeping fees.

You are behind on your books. If your last reconciled month is three or more months in the past, you have a growing problem. The longer you wait, the more expensive the cleanup. Our bookkeeping services include catch-up bookkeeping for sellers in this situation.

The CRA has contacted you. If you have received a review notice, information request, or audit letter from the CRA, bring in a CPA immediately. Do not respond to the CRA on your own without professional guidance. This applies doubly if the CRA is questioning your GST/HST reporting or your claimed expenses.

If any of these apply, our e-commerce accounting team handles Amazon FBA reconciliation, COGS tracking, GST/HST filing, and year-end tax preparation for Canadian sellers. Fixed monthly fee, no hourly billing surprises.

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