Transaction Cost Calculator finds percentage and fixed fees, net proceeds, volume cost, the gross charge needed for a target net, or average cost per transaction.

Enter the rate from the provider or venue you are evaluating; no potentially outdated provider rate is assumed.

Transaction Cost Formula

The following equation is used to calculate the Transaction Cost.

TC = CT / T

Formula source:  Staff Discussion Paper 2017-4: The Costs of Point-of-Sale Payments in Canada (2017)

  • Where TC is the cost per transaction ($/transaction)
  • CT is the cost of all transactions
  • #T is the number of transactions

To calculate the cost per transaction, divide the cost of all transactions by the number of transactions.

What is a Transaction Cost?

Definition:

A transaction cost is a measure of the average cost for every transaction that a business or person is charged.

How to Calculate Transaction Costs?

Example Problem:

The following example outlines the steps and information needed to calculate Transaction Costs.

First, determine the cost of all transactions. For this example, a business is charged $1,000.00 in transaction fees over a month.

Next, determine the number of transactions. In this case, the number of transactions is 50 over that one-month period.

Finally, calculate the cost per transaction using the formula above:

TC = CT / #T

TC = $1,000.00 / 50

TC = $20.00 / transaction