Card fee & processor comparison

Why adding 2.9% does not cover a 2.9% card fee

A common mistake when quoting customers or setting surcharges is simply adding the fee percentage to the price. For example, if you want $100 and add 2.9% ($2.90) plus $0.30 to charge $103.20, your processor takes 2.9% of the whole $103.20 ($2.99) plus $0.30, totaling $3.29. You net only $99.91, coming up short.

To receive your target net, you must gross up by dividing by the processor's retained percentage: (Desired Net + Fixed Fee ($)) / (1 - Rate / 100). For a $100 net at 2.9% + $0.30, the correct charge is $103.30.

A worked example

Suppose you invoice a consulting client for $500.00 and they want to pay by credit card with a 2.9% + $0.30 processing fee:

• Desired net: $500.00
• Target calculation: ($500.00 + $0.30) / (1 - 0.029) = $500.30 / 0.971 = $515.242
• Amount to charge: $515.25
• Processing fee taken: $515.25 x 2.9% + $0.30 = $14.94 + $0.30 = $15.24
• Net deposited to your bank: $515.25 - $15.24 = $500.01 (covers target in full)

Common mistakes

Enter the fees in your own agreement, including monthly charges. This is a pricing estimate, not permission to add a card surcharge. The comparison excludes refunds, disputes, and fees you have not entered. Actual totals can differ because processors round each transaction.