Why you cannot just add the postage
If a label costs $4.50 and you add exactly $4.50 to the price, Etsy's 6.5% transaction fee and 3% processing fee are charged on that $4.50 too. You end up about 43 cents short on every order. The fix is to add a little more, so that what is left after the fees is exactly your postage.
Amount to add = postage ÷ k
New price = old price + amount to add
The fixed fees ($0.20 listing and $0.25 processing) do not change, because you pay them once per order whether shipping is free or not.
Example: $4.50 postage, US rates
| Line | Amount |
|---|---|
| Keep rate (100% − 6.5% − 3%) | 90.5% |
| Amount to add ($4.50 ÷ 0.905) | $4.97 |
| Transaction fee on it (6.5%) | −$0.32 |
| Processing fee on it (3%) | −$0.15 |
| Left to pay the label | $4.50 |
So a $25 item becomes $29.97 with free shipping. If the order came from an Offsite Ad at 15%, you would need to add $5.96 instead.
Tips
- Use your real label price. Weigh the packed parcel and check the label price in Etsy's shipping tools; do not guess.
- Round to a clean price. $29.97 can become $29.99 or $30.00; the extra cents are a small buffer for heavier orders.
- Several items in one order. If buyers often buy more than one item, the postage per item is usually lower, so you may not need to add the full amount to every listing.
Check the full order in the Etsy fee calculator with shipping charged set to $0.
Frequently asked questions
Does Etsy charge fees on shipping?
Yes. Etsy's help page says the 6.5% transaction fee applies to the item price plus shipping and gift wrap, and payment processing is taken from the total sale price including shipping and sales tax. With free shipping, the same fees are charged on the higher item price instead.
Is free shipping worth it on Etsy?
Many buyers prefer a single all-in price. Whether it brings you more sales depends on your shop; this calculator makes sure free shipping does not cost you money when it does.
Why is the amount to add higher with Offsite Ads?
The Offsite Ads fee is a percentage of the order total too, so it also takes a share of the amount you add.
Sources
Etsy Help: What are the fees and taxes for selling on Etsy? · Etsy Help: Payment processing fees by country
Last reviewed: November 2026 · By Muhammad Shujah