Hong Life CalculatorsUnderstanding the payment processing fee calculator — concept and principle
Card processors such as Stripe and PayPal usually charge a percentage of each payment plus a small fixed fee per transaction, and may add surcharges for international cards or currency conversion. This calculator shows how much of a charge you actually receive, the effective fee rate, and how much you would need to charge so that you still net the original amount after fees. It works with any currency; the default is US dollars.
How it is calculated
With charge amount A, percentage fee p, international surcharge i, conversion fee c (all in %) and fixed fee f:
- Total fee = A × (p + i + c) ÷ 100 + f
- You receive = A − total fee
- Effective fee rate = total fee ÷ A × 100
- Charge needed to net A = (A + f) ÷ (1 − (p + i + c) ÷ 100)
The defaults, 2.9% + $0.30, match Stripe's widely quoted standard US online card price; check your provider's current pricing for your country and card mix.
The principle
The fixed part is the same for every payment, so it weighs heavily on small charges and almost disappears on large ones. To net a target amount you cannot just add the fee on top, because the processor also takes its percentage of the added part. Solving X − X × rate − f = A for X gives the gross-up formula above.
Worked example
- Inputs: charge $100, 2.9% fee, $0.30 fixed, no surcharges.
- Total fee: 100 × 0.029 + 0.30 = 2.90 + 0.30 = $3.20.
- You receive: 100 − 3.20 = $96.80.
- Effective rate: 3.20 ÷ 100 = 3.2%.
- To net $100: (100 + 0.30) ÷ (1 − 0.029) = 100.30 ÷ 0.971 = $103.30.
How to read the result
Compare the effective rate across price points: with the same pricing, a $5 charge costs 0.145 + 0.30 = $0.445, or 8.9%, while a $500 charge costs about 3.0%. If many of your payments are small, bundle them or look at pricing designed for micropayments.
Common mistakes
- Adding the fee to the price (100 + 3.20) and expecting to net $100; you would actually net slightly less.
- Forgetting extra percentages for foreign cards, currency conversion, disputes or payouts.
- Passing fees on to customers without checking local surcharge rules and card network rules.
Frequently asked questions
Is Stripe's fee the same in every country?
No. Stripe publishes separate pricing for each country, and rates differ for domestic, international and in-person cards.
Can I charge customers a card surcharge?
It depends on the country and the card networks' rules; some places prohibit or cap surcharges. Check before adding one.
Are refunded payments free?
Not necessarily. Many processors do not return the original fee on refunds; check your provider's terms.
Sources: Stripe, "Pricing" page for the United States (stripe.com/pricing)