What You Need to Know About Google Ads’ New 2.5% Surcharge in Canada 2024

As a trusted digital marketing agency in Montreal, WSI wants to keep you informed about important changes that may affect your PPC (pay-per-click) advertising campaigns. Starting October 1st, 2024, Google will implement a 2.5% surcharge on all Google Ads served in Canada. This change will impact businesses advertising to Canadian audiences, regardless of where the business is located.

What Does This Mean for Your Business?

If your business runs Google Ads targeting Canadian users, you will see this new surcharge applied to your ad spend. The surcharge affects both ad impressions and clicks, meaning it will be added on top of your current advertising budget.

For example, if your monthly ad budget is $1,000, you will incur an additional $25 surcharge on your invoice. This surcharge is automatic and will be applied in addition to your usual advertising costs, so it’s essential to adjust your budget accordingly.

Key Details to Be Aware Of:

• Effective Date: The 2.5% surcharge will begin on October 1st, 2024.
• Surcharge Application: Google will add this surcharge to the total amount spent on your Google Ads campaigns within the Canadian market.
• Budget Planning: Ensure that your business accounts for this additional charge in your advertising budget. For instance, if you have a campaign with a set budget of $100, your total charge will be $102.50 after the surcharge (plus applicable taxes).
• Advertiser Responsibility: It’s important to ensure that your campaign’s target settings are correct. Google will not refund surcharges on legitimate clicks and impressions within your chosen geographic regions.

Why Is Google Implementing This Surcharge?

This surcharge is part of Google’s compliance with Digital Services Taxes (DST) introduced in several countries, like Spain, France, the UK, and now including Canada. These taxes are beyond the control of any advertiser and paid search agency like WSI, but they will affect the overall cost of running ads in Canada.

What Should Your Business Do Next?

• Plan for the Change: Review your current advertising budget and factor in the 2.5% surcharge when planning future campaigns. Depending on the scale of your advertising efforts, this additional cost can impact your overall marketing budget.
• Ensure Accurate Targeting: Verify that your campaigns are set to target the correct geographic locations. Any mistakes in targeting could result in unnecessary surcharges, and Google will not issue refunds for those.
• Communicate with Your Team: If your marketing team or advertising partners manage your PPC campaigns, make sure they are aware of this change so they can make any necessary adjustments.

Frequently Asked Questions about Google Ads 2.5% Canada Surcharge

Can I avoid the surcharge by changing my ad targeting settings?

• The surcharge applies to ads served in Canada. If your campaigns target Canadian users, this fee will apply. However, if your business does not intend to target Canada, ensure your campaign settings are adjusted correctly to avoid unnecessary charges. Google will not refund surcharges based on legitimate clicks or impressions served according to your campaign’s target settings.

How can I best prepare my business for this surcharge?

• To prepare for the surcharge, review your advertising budget and adjust it accordingly. Ensure that your campaign targeting settings are accurate, and communicate with your marketing team or partners about this change to avoid any unexpected costs. Consider reviewing your overall digital strategy to ensure that your ad spend remains effective even with the additional fee.

Will the Google surcharge apply to all types of Google Ads, such as Search, Display, and YouTube?

• Yes, the 2.5% surcharge will apply to all types of Google Ads served in Canada, including Search, Display, and YouTube ads. Any ad impression or click generated within the Canadian market will incur this additional fee.

How will the surcharge affect my monthly reporting and invoicing?

• The 2.5% surcharge will be reflected in your monthly billing statement as a separate line item. It will be applied to your total ad spend for the month, so you’ll need to account for this additional charge in your financial reporting.

Are there any tax implications associated with this new surcharge?

• The surcharge is applied before taxes, meaning it will increase your total taxable amount. Be sure to factor this into your financial planning to avoid surprises during tax reporting.

Staying Ahead with WSI Digital Marketing Montreal.

At WSI Montreal, we’re committed to helping businesses like yours navigate changes in the digital advertising landscape. This new surcharge is an important update, and we’re here to ensure that you’re fully prepared. If you need assistance with adjusting your campaigns or strategies, our team is ready to help.

For more detailed information, you can read Google’s official announcement.