For businesses that accept credit and debit cards, understanding the associated processing fees is crucial for accurate financial planning and profitability. These fees are charged by payment processors for handling transactions, covering costs related to authorization, settlement, security, and compliance. This calculator helps you estimate these costs based on your sales volume and the fee structure you are being charged.
How Credit Card Processing Fees Work
Credit card processing fees are typically composed of several components, often bundled together by a payment processor. The main elements you'll encounter are:
Interchange Fees: Set by card networks (Visa, Mastercard, etc.), these are paid to the card-issuing bank. They vary based on card type (rewards, debit, corporate), transaction method (swiped, keyed-in, online), and merchant category.
Assessment Fees: Also set by card networks, these are smaller fees charged as a percentage of the transaction volume.
Processor Markup/Fees: This is the fee charged by your payment processor for their services. It can be a percentage, a fixed fee per transaction, or a combination, often including monthly account fees, gateway fees, PCI compliance fees, etc.
The Calculation Explained
Our calculator simplifies this by asking for an Average Card Processing Fee (%) and a Fixed Fee Per Transaction ($), which represents the combined rates your processor charges.
The total monthly processing fee is calculated as follows:
Calculate the total volume of card sales: Total Card Sales = Average Monthly Sales Volume * Average Transaction Value
Calculate the percentage-based fees: Percentage Fees = Total Card Sales * (Average Card Processing Fee / 100)
Calculate the total number of transactions: Total Transactions = Average Monthly Sales Volume / Average Transaction Value
Calculate the fixed per-transaction fees: Fixed Fees = Total Transactions * Fixed Fee Per Transaction
Calculate the total estimated monthly processing fees: Total Estimated Fees = Percentage Fees + Fixed Fees
Calculate the effective fee percentage: Effective Fee Percentage = (Total Estimated Fees / Total Card Sales) * 100
Example Scenario:
Let's say your business has:
Average Monthly Sales Volume: $15,000
Average Transaction Value: $40
Average Card Processing Fee: 2.9%
Fixed Fee Per Transaction: $0.30
Here's how the calculation would break down:
Total Card Sales: $15,000 (assuming all sales are via card for this example)
Percentage Fees: $15,000 * (2.9 / 100) = $435.00
Total Transactions: $15,000 / $40 = 375 transactions
Fixed Fees: 375 * $0.30 = $112.50
Total Estimated Monthly Fees: $435.00 + $112.50 = $547.50
This calculator provides a helpful estimate to budget effectively for these essential business costs. Remember that actual fees can vary based on your specific processor agreement and the mix of card types processed.
function calculateFees() {
var monthlySales = parseFloat(document.getElementById("monthlySales").value);
var averageTransaction = parseFloat(document.getElementById("averageTransaction").value);
var cardProcessingFee = parseFloat(document.getElementById("cardProcessingFee").value);
var fixedFeePerTransaction = parseFloat(document.getElementById("fixedFeePerTransaction").value);
var resultDiv = document.getElementById("result");
var totalFeesDisplay = document.getElementById("totalFees");
var feePercentageDisplay = document.getElementById("feePercentage");
// Input validation
if (isNaN(monthlySales) || monthlySales <= 0 ||
isNaN(averageTransaction) || averageTransaction <= 0 ||
isNaN(cardProcessingFee) || cardProcessingFee < 0 ||
isNaN(fixedFeePerTransaction) || fixedFeePerTransaction < 0) {
alert("Please enter valid positive numbers for all fields.");
resultDiv.style.display = "none";
return;
}
// Calculations
// Assuming monthlySales represents the total dollar volume of transactions
var totalCardSales = monthlySales;
var percentageFees = totalCardSales * (cardProcessingFee / 100);
var totalTransactions = monthlySales / averageTransaction;
var fixedFees = totalTransactions * fixedFeePerTransaction;
var totalEstimatedFees = percentageFees + fixedFees;
var effectiveFeePercentage = (totalEstimatedFees / totalCardSales) * 100;
// Display results
totalFeesDisplay.textContent = "$" + totalEstimatedFees.toFixed(2);
feePercentageDisplay.textContent = effectiveFeePercentage.toFixed(2) + "%";
resultDiv.style.display = "block";
}