Etsy fees explained with worked examples: what you actually keep on a $38 sale

Etsy's fees are simple one at a time. Together they're easy to underestimate, especially the two that surprise sellers most: payment processing is charged on sales tax as well, and an Offsite Ads sale can take a quarter of the order. Here are the US fees on real orders, with the arithmetic shown.

The fees (US shops, September 2026)

Fee	Rate	Charged on
Listing	$0.20	Per listing, and again on every sale (Etsy auto-renews the listing)
Transaction	6.5%	Item price + shipping (+ gift wrap)
Payment processing	3% + $0.25	The whole order: price + shipping + sales tax
Offsite Ads	15% (12% for shops over $10k/yr)	Price + shipping, only for orders from an offsite ad; capped at $100 per order

Etsy changes these; check etsy.com/legal/fees before relying on them. New shops also pay a one-time setup fee (around $15 in the US).

Example 1: a $38 ring with $4.50 shipping

Etsy's percentage fees apply to price + shipping, so the base is $42.50. With no sales tax on the order:

Listing                          $0.20
Transaction   6.5% × $42.50  =   $2.76
Processing    3% × $42.50 + $0.25 = $1.53
                                -------
Etsy fees                        $4.49   (10.6% of the order)

If the ring costs you $9.50 in materials, $1.20 packaging, a $4.10 postage label and $6 of labor ($20.80 in total), you keep $17.21, a 45% margin on the $38 price.

Example 2: the same ring, from an Offsite Ad

Add 15% × $42.50 = $6.38. Fees jump to $10.87, a quarter of the order, and profit drops from $17.21 to $10.83. Your margin on that sale falls from 45% to 28.5%. If you can't opt out of Offsite Ads (shops over $10k in yearly sales can't), price with this in mind.

Example 3: a $900 quilt from an Offsite Ad, where the cap kicks in

15% × $925 would be $138.75, but the Offsite Ads fee is capped at $100 per order. The cap only matters for orders above about $667 (at 15%).

Example 4: a $12 digital download

No shipping and no materials: $0.20 + $0.78 + $0.61 = $1.59 in fees, so you keep $10.41 (87%). That's why digital products are popular with sellers.

Sales tax: the processing fee grows with it

Etsy collects and remits US sales tax, so it isn't your income. But the 3% processing fee is charged on it. On the ring, a 7% sales tax adds about $0.09 in fees. It's small on one sale, but it adds up across a year of orders.

Pricing for a target margin

Because most fees are percentages of the price, "cost + markup" pricing underestimates. To keep a 35% margin after fees on the ring (non-ad sale), you can solve for the price directly: about $30.95. From an ad sale, you'd need about $44.08 for the same margin. The difference is the real cost of Offsite Ads.