My payment gateway charges a percentage plus a fixed amount per transaction: how do I turn that into a variable cost per unit?
Work the fee out on your actual selling price: price × percentage + the fixed amount per transaction, then add the result to the product cost. At a price of 200 with fees of 2.5% plus 1, the fee is 6, so the variable cost becomes 126 instead of 120. If one order usually holds several units, share the fixed part between them.
Why the percentage alone will not do
The variable cost field in the Break-even calculator takes an amount of money, not a percentage, because the calculator subtracts it directly from the unit price to get the contribution. A percentage means nothing until you know which price it applies to, so you convert it into an amount once for each price you test.
The conversion, step by step
- Take the fee rate from your own gateway contract, not a figure you heard somewhere. Say it is 2.5% plus 1 per transaction.
- Apply the rate to the selling price: 200 × 2.5% = 5.
- Add the fixed part: 5 + 1 = 6 per order.
- Add the fee to the product cost: 120 + 6 = 126. That is the variable cost you enter.
With fixed costs of 7,000, a price of 200 and a variable cost of 126, the calculator shows a contribution of 74, a ratio of 37%, and an exact break-even of 94.59, rounded up to 95 units, with revenue of 19,000 at that volume.
How many units did the fees add?
Leave the fee out and enter 120, and the contribution is 80 with a break-even of 87.5, rounded up to 88 units. The payment fees alone ask for 7 more units every month. Small, but it repeats every month, and forgetting it makes you think you have broken even when you have not.
When customers buy more than one unit per order
The percentage applies to the whole order, so it stays at 5 per unit priced at 200. The fixed 1 is paid once per order, though, so if an average order holds two units, each unit carries only half of it. The variable cost becomes 120 + 5 + 0.5 = 125.5, the contribution 74.5, and break-even 93.96, rounded up to 94 units.
- Get the average units per order from last month's orders in your store dashboard.
- Recalculate the fee whenever you change the price, since the percentage part moves with it.
- If you offer several payment methods with different fees, use an average weighted by how customers actually pay.
If you want the price itself worked out so it covers a fee percentage and a target margin together, use the Selling-price calculator, then check the resulting unit margin with the Profit margin calculator.
Common questions
Is there a fee percentage field in the calculator?
No. It has three fields: fixed costs, unit price and variable cost per unit. Fees go into the last one as an amount.
Where does a monthly gateway subscription go?
If you pay it every month regardless of sales, it is a fixed cost.
Is the percentage charged before or after VAT?
That depends on your gateway contract. The calculator does not handle tax, so apply the rate to whatever amount the gateway actually charges on.