# Effective Rate Calculator

URL: https://www.paydude.io/resources/tools/effective-rate-calculator
Type: Free interactive calculator
Summary: Enter your monthly volume, total fees and transaction count to get your true effective rate, plus your cost per transaction.

Take three numbers off a single monthly statement — total volume processed, total fees paid, and number of transactions — and this works out what you actually paid as a percentage.

## Why the headline rate misleads

Every processor advertises a percentage plus a fixed fee. The percentage is comparable between providers; the fixed fee is not, because what it costs you depends entirely on your average transaction size.

**The same 2.9% + 30¢ rate at three ticket sizes**

| Average transaction | Fixed fee as a % | Effective rate |
| --- | --- | --- |
| $10 | 3.00% | 5.90% |
| $50 | 0.60% | 3.50% |
| $250 | 0.12% | 3.02% |

A coffee shop and a furniture retailer on identical published rates pay very different effective rates. That is why the effective rate is the only figure worth comparing.

## How to work it out

1. **Take one month's statement** — Use a single settlement period so the volume and the fees cover exactly the same transactions.
2. **Find total volume processed** — Gross card volume before fees and before refunds are netted out.
3. **Find total fees** — Everything the processor charged: percentage, fixed fees, surcharges, monthly fees and dispute fees.
4. **Divide fees by volume** — Multiply by 100 for a percentage. That is your effective rate.

> **Rule of thumb:** Below a $25 average ticket, the fixed per-transaction fee usually costs you more than any difference in the percentage rate. Optimise the fixed fee first.

**Compare it against Paydude** Published tiers, applied automatically by volume. — [See our rates](https://www.paydude.io/pricing)

## Frequently asked questions

### What is a good effective rate?

It depends heavily on your average transaction size and card mix. For card-not-present ecommerce with a healthy ticket size, mid-to-high 2% is common; below a $15 average ticket, effective rates above 4% are normal regardless of provider.

### Should refunds count toward volume?

Use gross processed volume, not net. Most processors do not refund the fixed fee on a refunded transaction, so netting refunds out understates what you paid.

### Why is my effective rate higher than my quoted rate?

Almost always some combination of the fixed per-transaction fee on small tickets, international or premium card surcharges, and monthly or dispute fees that the quoted rate never included.