Payment Fees

How Payment Fees Works

Fee = Amount × Rate + Fixed Fee | Net = Amount − Fee

Rate

Percentage Fee — The percentage of the transaction amount charged by the processor, typically 2.5–4.5%.

Fixed

Fixed Per-Transaction Fee — A flat fee charged on each transaction, typically $0.10–$0.49.

Net

Net Amount (Payout) — The amount you actually receive after all fees are deducted.

How to Use

1. Enter the invoice or sale amount you plan to charge.
2. Select your payment platform (Stripe, PayPal, or Square).
3. Toggle "Calculate what to invoice" to see how much to charge to receive a specific net amount.
4. View the fee breakdown and your net payout.

Quick Reference

Common Uses

• •Calculating the net amount you will actually receive after credit card processing fees on each transaction
• •Determining how much to invoice a client so that after processing fees you receive exactly the amount you need
• •Comparing fee structures across payment processors (Stripe, PayPal, Square) to choose the most cost-effective option for your business

Understanding the Result

Worked Examples

Frequently Asked Questions

Why do international transactions cost more?

International transactions incur higher interchange fees because of currency conversion, cross-border settlement, and increased fraud risk. Stripe charges 3.9% + $0.30 for international cards vs. 2.9% + $0.30 for domestic ones.

How should I account for fees when pricing?

Use the reverse mode to determine what to charge. If you need to net $100 and fees are 2.9% + $0.30, you need to invoice approximately $103.30. Many businesses either absorb the fee as a cost of doing business or add a surcharge (where legally permitted).

Which platform has the lowest fees?

For domestic transactions, Square has the lowest rate at 2.6% + $0.10. Stripe Domestic (2.9% + $0.30) and PayPal Domestic (2.99% + $0.49) are comparable. For international, Stripe's 3.9% + $0.30 is generally lower than PayPal's 4.49% + $0.49. However, consider other factors like features, integrations, and customer experience.

What is the difference between interchange, assessment, and processor markup?

Interchange fees are paid to the card-issuing bank (typically 1.5–2.5% of the transaction) and are set by card networks. Assessment fees are paid to the card network (Visa, Mastercard, Amex) and are typically 0.13–0.15%. The processor markup is what Stripe, PayPal, or Square charges for their service — this is where they make their profit. Flat-rate processors like the ones in this calculator bundle all three into a single rate, making them simpler but sometimes more expensive than interchange-plus pricing for high-volume merchants processing over $50K/month.

Should I pass processing fees to customers?

In most US states, you can legally add a surcharge for credit card payments (typically up to 4%), but you must: display clear signage at the point of sale, list the surcharge as a separate line item on the receipt, and NOT apply surcharges to debit cards even when processed as credit. Some states (Colorado, Connecticut, Massachusetts) restrict surcharging. Passing fees to customers saves you money but may create friction — many businesses instead build the processing cost into their pricing, treating it as a cost of doing business. For B2B invoices over $500, consider ACH/bank transfer payments which cost $0.50–1.50 flat fee instead of a percentage.

How do chargeback fees factor into my costs?

Beyond the processing fee, chargebacks (when a customer disputes a charge) come with additional fees of $15–25 per incident regardless of who wins the dispute. Even if you win, you typically still pay the fee (Stripe is an exception — they refund the $15 dispute fee if you win). A single chargeback can wipe out the profit from many small transactions. Chargeback rates above 0.75–1% can result in your merchant account being terminated or placed in a high-risk category with even higher processing rates. This calculator does not include chargeback costs — factor them separately based on your business's dispute history.

Pro Tips

• →Always use the reverse mode when invoicing clients — enter the amount you NEED to receive, and the calculator tells you what to charge. This ensures processing fees come out of the client's payment rather than your margin. For B2B invoices over $500, consider ACH or wire transfer as an alternative — flat fees of $0.50–1.50 for ACH are dramatically cheaper than 2.9% on large amounts.
• →The $0.30 fixed fee has a disproportionate impact on small transactions. A $5 coffee purchase processed via Stripe has an effective rate of 8.9% (fee of $0.45 on $5). If you sell low-priced items, consider: bundling products to increase average order value, setting a minimum transaction amount, using a micropayments rate if your processor offers one, or switching to a processor with a lower fixed fee (Square at $0.10 is better for small transactions).
• →For subscription/recurring billing, Stripe charges the same rate as one-time payments. However, if you have high-value annual subscriptions ($500+), encourage annual billing with a small discount (e.g., 5% off) — you pay one transaction fee instead of 12 monthly fees, saving significantly on processing costs while improving cash flow predictability. For a $100/month subscription: 12 × ($100 × 0.029 + $0.30) = $38.40/year in fees vs. one annual charge: ($1,200 × 0.029 + $0.30) = $35.10 — saving $3.30/year per customer plus improving retention.
• →International sellers lose 1% extra on cross-border transactions with Stripe. If you sell internationally, consider: setting up a local entity or Stripe account in your largest foreign market (e.g., Stripe UK for European customers), using a merchant of record service that handles local payment methods, or accepting local payment methods (iDEAL in Netherlands, SEPA in EU) that have lower fees than international card processing.
• →Fraud and chargeback costs can dwarf processing fees. For every $100 in processing fees you pay, a single $50 chargeback (with $15 dispute fee) can cost an additional $65+. Use Stripe Radar (included) or similar fraud tools, require CVV for all transactions, and consider 3D Secure for high-risk orders. The calculator shows processing fees — always add 0.5–1% to your mental model for fraud and dispute costs.

Limitations to Know

• •This calculator compares flat-rate pricing from major processors (Stripe, PayPal, Square) using their publicly listed standard rates as of 2026. It does not account for negotiated/custom rates or interchange-plus pricing.
• •It does not include additional fees such as monthly gateway fees ($10–25/month), PCI compliance fees, chargeback/dispute fees ($15–25 per incident), or ACH/bank transfer alternatives.
• •Currency conversion fees (typically 1–2% above the mid-market rate) and tax handling (sales tax, VAT, GST) are not modeled.
• •Rates were verified at time of development but processors change pricing periodically — always check the processor's current pricing page before making business decisions.

Sources

• Stripe
• PayPal
• Square