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Calculate exactly how much you will receive after payment processor fees. Compare Stripe, PayPal, and Bank Transfers to keep more of your hard-earned money.
Step-by-step breakdown of the underlying equations.
To receive a flat $2,500 after fees, you should actually invoice your client for $2574.67.
Payment processing fees represent one of the most persistent operational leaks in independent contracting and freelance operations. Merchant processors like Stripe, PayPal, and Payoneer deduct both a percentage of gross invoice value and a fixed transaction fee prior to settling net funds into your business checking account.
Worked Example:\nA freelance consultant issues a $2,500.00 invoice paid via credit card through Stripe (2.90% + $0.30 fixed):\n• Variable Fee: $2,500 × 0.029 = $72.50\n• Fixed Transaction Surcharge: $0.30\n• Total Processing Fee Deducted: $72.80 (2.91% effective drag)\n• Net Funds Deposited: $2,427.20\n• Required Gross Invoice to Net Exactly $2,500: ($2,500 + $0.30) / (1 − 0.029) = $2,500.30 / 0.971 = $2,574.97.
The Amount Hitting Your Bank reflects your actual cleared cash after merchant deductions. Consult the Gross-Up recommendation to ensure client contracts protect your contractual net margins.
In most US jurisdictions and international markets, passing merchant processing surcharges is legal if clearly disclosed upfront in your written contract. However, select US states (such as Connecticut and Massachusetts) restrict credit card surcharging, requiring businesses to offer cash/ACH discounts instead.
ACH payments (like Stripe Financial Connections or bank wire transfers) typically cap fees at 0.80% or a maximum flat rate of $5.00, compared to 2.9% to 3.5% for credit card swipes. For invoices exceeding $1,000, requesting bank transfers saves significant overhead.
Yes. Payment processing merchant fees (Stripe, PayPal, merchant merchant acquirers) are 100% tax-deductible as ordinary and necessary business operating expenses under IRS Schedule C (Line 10: Commissions and fees).
Processing payments from foreign client cards adds an international cross-border fee (typically +1.50%) and a currency conversion surcharge (typically +1.00%), increasing effective deductions from ~2.9% to over 5.4%.
If a client disputes an invoice, processors charge an administrative chargeback fee ($15 to $20) while freezing disputed funds. Written contracts and milestone sign-offs are critical evidence to rebut disputes.
Data verified: September 2026