Know the Figures

Payment Fee Gross-Up

What to charge so you still receive the full amount after percentage and fixed payment fees.

Replaces: Processor fee calculators that only work one way

How to use it

Enter the amount you need to land in your account, your processor’s percentage fee, its fixed fee per payment and any cross-border extra. The result is what to charge so that, after fees, exactly that amount arrives — plus how short the common shortcut of adding the percentage on would leave you.

Where the number comes from

  • A processor takes its percentage of the whole payment, then the fixed fee. If you charge C, you receive C × (1 − percentage) − fixed fee.
  • Setting that equal to the amount you need and solving gives C = (amount + fixed fee) ÷ (1 − percentage). The percentage includes any cross-border extra, added to the base rate.
  • The fee is the charge minus the amount you receive, and the effective rate is that fee as a share of the charge.
  • The shortcut adds the percentage of the amount and the fixed fee on top: amount × (1 + percentage) + fixed fee. The processor then charges its percentage on the added part too, so you land short by amount × percentage² + fixed fee × percentage.
  • The table repeats the gross-up at payment sizes from 10 to 10,000 with your amount added, to show how the fixed fee dominates small payments.

What goes wrong

The part most calculators leave out.

  • Some processors charge different rates by card type, region or payment method, and some add the cross-border extra only on part of the payment. A single combined rate is an average; a premium or foreign card can still leave you short.
  • Refunds rarely return the fee. If you gross up a payment and later refund it, you may be out of pocket by the fee, so the gross-up only holds for payments that stick.
  • Where currency conversion is involved, the rate applied to the payment is a separate cost from any percentage fee. This calculation covers the percentage and fixed fees only, not a conversion spread.
  • Some processors round fees per payment or charge a minimum fee. On small payments that rounding or minimum can move the answer by a cent or more.
  • Adding a surcharge is not the same as raising your price. Surcharge rules vary by place and card network, and a customer seeing a fee line may react differently from one seeing a higher price.

Receiving 1,000 after a 2.9% plus 0.30 fee

To have 1,000 arrive after a 2.9% fee and a fixed 0.30, divide 1,000.30 by 0.971 and charge 1,030.18. The total fee is 30.18, an effective rate of 2.93% of the charge. The shortcut of adding 2.9% and 0.30 gives 1,029.30; the processor takes 2.9% of that, 29.85, plus 0.30, leaving 999.15 — 0.85 short. On a 10 payment the fixed fee matters far more: you charge 10.61, an effective rate of 5.7%.

Questions

Why isn’t adding the percentage fee enough?
Because the processor takes its percentage of the whole payment, including the part you added to cover the fee. Adding 2.9% to 1,000 gives 1,029, and 2.9% of 1,029 is more than 29. Dividing by (1 − 2.9%) instead of multiplying by (1 + 2.9%) covers the fee on the fee.
How do I gross up an amount for payment fees?
Add the fixed fee to the amount you need, then divide by one minus the percentage fee as a decimal. To receive 500 with a 3% fee and a 0.25 fixed fee: (500 + 0.25) ÷ 0.97 = 515.72.
Why is the effective rate so high on small payments?
The fixed fee is the same on every payment, so on a small one it is a large share. A 0.30 fixed fee is 3% of a 10 payment on its own, before the percentage fee is added.
Can I pass the fee on to my customer?
It depends on where you and your customers are and on your processor’s and the card networks’ rules. Some places ban card surcharges, some cap them and some require them to be shown before payment. This calculator shows the arithmetic only; check the rules that apply to you.
Does anything I type get sent anywhere?
No. The whole calculation runs in your browser. Nothing is sent to us or logged, and there is no account to create. Your browser keeps the figures with this tab’s history so that Back and Reload bring them back, and Reset clears them.

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