The short answer
Etsy charges 3% + $0.25 per transaction for payment processing (US sellers). This fee applies to your entire order total—item price, shipping, and gift wrapping combined.
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On a $50 order with $8 shipping, you pay $1.99 in payment processing fees: ($58 x 0.03) + $0.25.
This is separate from Etsy's 6.5% transaction fee. You pay both on every sale that goes through Etsy Payments.
Who this is for
Sellers who want to understand exactly how Etsy's payment processing fee works—what it covers, when it applies, and how it compares to processing payments yourself or on other platforms.
How payment processing fees are calculated
The formula is straightforward:
Payment Processing Fee = (Order Total × 3%) + $0.25
Where Order Total = Item Price + Shipping + Gift Wrap
Example calculations
$25 item, free shipping:
- Order total: $25.00
- Payment processing: ($25 × 0.03) + $0.25 = $1.00
$50 item + $10 shipping:
- Order total: $60.00
- Payment processing: ($60 × 0.03) + $0.25 = $2.05
$100 item + $15 shipping + $5 gift wrap:
- Order total: $120.00
- Payment processing: ($120 × 0.03) + $0.25 = $3.85
The shipping fee trap
Many sellers don't realize payment processing applies to shipping charges. If you charge $15 for shipping, you pay an extra $0.45 (3% of $15) in payment processing fees on top of what you pay for the 6.5% transaction fee.
This is why some sellers build shipping into their item price and offer "free shipping"—you pay the same fees either way, but it's less psychologically painful when it's not itemized separately.
Payment processing vs. transaction fee
These are two different fees, and Etsy charges both on every sale:
| Fee Type | Rate | What It Covers |
|---|---|---|
| Transaction fee | 6.5% of order total | Etsy's commission for using the marketplace |
| Payment processing fee | 3% + $0.25 | Cost of accepting credit cards, PayPal, etc. |
On a $50 sale, you pay:
- Transaction fee: $3.25 (6.5%)
- Payment processing: $1.75 (3% + $0.25)
- Total: $5.00 (10% of sale)
The payment processing fee is Etsy's cost of running payments through their system. Every credit card transaction has processing costs—Stripe, Square, and PayPal charge similar rates. Etsy passes this cost to sellers rather than absorbing it.
See your real Etsy take-home
Enter your sale price and see exactly what you keep after all fees.
International payment processing rates
Rates vary based on where your bank account is located, not where your buyers are:
| Country | Payment Processing Rate |
|---|---|
| United States | 3% + $0.25 |
| Canada | 3% + $0.25 CAD |
| Australia | 3% + $0.25 AUD |
| United Kingdom | 4% + £0.20 |
| EU countries | 4% + €0.30 |
| Japan | 6% + ¥30 |
| Mexico | 4.5% + $4 MXN |
| Singapore | 4.5% + $0.30 SGD |
Additional fees for international sellers
UK sellers: Pay 20% VAT on all Etsy service fees (including payment processing).
Australian sellers: Pay 10% GST on Etsy service fees.
Currency conversion: If you list items in a currency different from your Etsy Payments account, you pay an additional 2.5% currency conversion fee. Always list in your payment account currency to avoid this.
Comparison with other payment processors
How does Etsy compare to processing payments yourself?
| Processor | Rate | Best For |
|---|---|---|
| Etsy Payments | 3% + $0.25 | Required for Etsy sellers |
| Stripe | 2.9% + $0.30 | Shopify, custom stores |
| PayPal | 2.99% + $0.49 | eBay, invoicing |
| Square | 2.6% + $0.10 | In-person sales |
| Shopify Payments | 2.4-2.9% + $0.30 | Shopify stores (varies by plan) |
Etsy's rate is competitive with industry standards. The 3% + $0.25 is actually slightly lower than Stripe's 2.9% + $0.30 on orders under $50.
The key difference: with Etsy, you also pay the 6.5% transaction fee. On Shopify, you only pay the payment processing—but you're responsible for driving all your own traffic.
Is Etsy Payments mandatory?
Yes, for most sellers. Etsy Payments is required in 36+ countries including:
- United States
- United Kingdom
- Canada
- Australia
- Germany, France, Italy, Spain
- Netherlands, Belgium, Austria
- And more EU countries
You cannot use standalone PayPal as your only payment method. All transactions must go through Etsy Payments, which accepts credit cards, debit cards, PayPal, Apple Pay, Google Pay, and Etsy gift cards.
Tips to minimize payment processing impact
1. Encourage larger orders
The $0.25 flat fee has less impact on larger orders:
- $10 order: $0.25 = 2.5% of order
- $50 order: $0.25 = 0.5% of order
- $100 order: $0.25 = 0.25% of order
Offer quantity discounts, product bundles, or free shipping thresholds to encourage buyers to add more to their cart.
2. Build fees into your pricing
Don't price based on costs alone. Add 12-15% to your target price to account for all Etsy fees:
Minimum Price = (Your Costs + Desired Profit) × 1.12
This ensures you're profitable after listing fees, transaction fees, and payment processing. Use our Etsy Fee Calculator to run the exact numbers on any product before you list.
3. List in your local currency
Avoid the 2.5% currency conversion fee by listing items in the same currency as your Etsy Payments account. If your bank is in USD, list in USD.
4. Don't fight free shipping
Whether you charge shipping separately or build it into your price, you pay the same payment processing fee on the total. Offering free shipping:
- Looks better to buyers
- Gets Etsy's search ranking boost
- Simplifies your pricing math
5. Focus on profit margins, not fee avoidance
You can't avoid payment processing fees—they're the cost of accepting credit cards anywhere. Instead of trying to minimize a 3% fee, focus on:
- Sourcing materials more efficiently
- Raising prices where the market supports it
- Improving conversion rate on existing traffic
A 10% price increase has more impact than eliminating a 3% fee you can't actually eliminate.
FAQ
What is Etsy's payment processing fee?
Etsy charges 3% of your order total plus $0.25 per transaction for payment processing. This covers the cost of accepting credit cards, PayPal, and other payment methods through Etsy Payments. The fee applies to your item price plus shipping and gift wrapping.
Why does Etsy charge payment processing fees?
Payment processing fees cover the cost of accepting electronic payments. Every credit card transaction incurs fees from the card networks (Visa, Mastercard, etc.). Etsy passes this cost to sellers rather than absorbing it or building it into higher transaction fees.
Is the payment processing fee the same as the transaction fee?
No. The 6.5% transaction fee is Etsy's commission for using the marketplace. The 3% + $0.25 payment processing fee covers credit card processing costs. You pay both on every sale—approximately 10% total before any other fees.
Do payment processing fees apply to shipping?
Yes. Payment processing fees apply to your entire order total, including item price, shipping charges, and gift wrapping. If you charge $10 for shipping, you pay an extra $0.30 in payment processing on that shipping charge.
Can I avoid Etsy payment processing fees?
No. Etsy Payments is mandatory for sellers in most countries. You cannot use a different payment processor or accept payments outside of Etsy's system. The 3% + $0.25 fee applies to all orders.
How do I see payment processing fees in my shop?
Go to Shop Manager → Finances → Payment Account. Click any deposit to see the breakdown of fees for each order, including payment processing charges.
Complete fee breakdown
Payment processing is just one part of what Etsy takes from each sale. For the full picture—listing fees, transaction fees, Offsite Ads, and more—see our complete guide to Etsy seller fees explained. Or use our Etsy Fee Calculator to see your total fees on any product.
See your real Etsy take-home
Enter your sale price and see exactly what you keep after all fees.
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