If you’ve ever looked at a payment deposit from a payment processor and wondered why the amount doesn’t match what you charged, you’re not alone. Every payment processor––including Square––applies fees before funds reach your account.
Our Square fee calculator makes it simple to understand what those payment processing fees are and how they affect your bottom line.In this blog, we will walk you through how Square fees work, how to use the calculator, and smart ways to forecast and reduce those costs over time. Whether you are a small business owner or a side hustler using Square to get paid, this post is for you.
What you need to know
- Square charges different fees depending on how you accept the payment, such as in-person, online, or manually entered.
- Payment processing fees are deducted before depositing received payments into your account.
- If you issue a refund, most platforms do not return the processing fee.
- Square processing fees can be written off as a business expense when you file your taxes.
What are Square fees and how do they work?
Square fees are transaction charges taken out automatically every time you get paid through the platform.
Here is how fees differ based on how your customer pays:
- In-person (card reader or tap): This is the standard fee when a customer taps, swipes, or inserts their card using a Square reader.
- Keyed in manually: You will pay more if you enter the card details by hand, since it is considered higher risk.
- Online or invoice payments: When customers pay through your website or a Square invoice, the fee is slightly higher than in-person payments at 2.9% + 30¢ per transaction.
- Afterpay (buy now, pay later): Square partners with Afterpay, and while it offers flexible payment options for your customers, it comes with a steeper fee.
These fees are taken out before your money is deposited, which is why your actual payout is always a bit less than the sale price.
Did you know?
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How to calculate Square fees
Calculating Square fees is pretty simple once you know the rate for the type of payment you are accepting. The formula looks like this:
Total sale amount × Square’s percentage fee + flat fee = Square’s cut
Total sale amount – Square’s cut = Your actual payout
Let us break it down with an example:
Say you make a $150 in-person sale via card. Considering that Square’s in-person fee is 2.6% + 10¢, here’s the math:
- 2.6% of $150 = $3.90
- Add the flat fee of 10¢ = $4 total fee
- Your final payout = $150 – $4 = $146
The same logic applies regardless of the payment method—you just need to plug in the right percentage and flat fee.
Want to skip doing the math yourself? Use our Square fee processing calculator to see exactly what you will take home before you even make the sale.
Square’s fee structure
Square’s fee structure is flat rate and transparent—no monthly fees, no surprise charges. You only pay when you get paid. But the exact fee depends on how you accept the payment: in-person, online, manually entered, or through services like Afterpay.
Understanding this structure helps you choose the most cost-effective way to run transactions.
| Payment Type | Fee | Details |
|---|---|---|
| In-person (card present) | 2.6% + 10¢ per transaction | Tap, dip, or swipe using Square hardware—for example, using a Square Reader at a pop-up shop or retail counter |
| Online payments | 2.9% + 30¢ per transaction | Payments through ecommerce sites, payment links, or your Square Online store—like a customer buying directly from your website |
| Keyed-in card payments | 3.5% + 15¢ per transaction | Manually entered card info—for example, taking a phone order and typing in the card details |
| Invoice payments | 3.3% + 30¢ per transaction | Payments sent through Square’s invoicing system—like billing a client for a service, and they pay via email link |
| ACH bank transfers | 1% per transaction ($1 minimum) | Direct bank-to-bank payments, often used for large invoices or recurring client work |
| Afterpay transactions | 6% + 30¢ per transaction | Buy now, pay later option for customers, which is common in retail or beauty businesses that offer flexible payments |
5 tips to shrink your Square fee bill
A few simple changes to how you accept payments can lower your overall fees without changing much about how you do business. Here is how to keep more of what you earn:
- Prioritize in-person payments: Use a card reader (tap, dip, or swipe) as much as possible. It is Square’s lowest fee rate, and using hardware like the Square Reader or Terminal keeps more money in your pocket.
- Encourage ACH transfers for big payments: For high-value invoices or recurring clients, consider offering ACH bank transfers instead of cards. You will pay just 1% (minimum $1), which is far cheaper than any card transaction.
- Avoid manually entering card info: Do not key in card numbers unless you absolutely have to—it is the most expensive fee type at 3.5% + 15¢. Instead, use payment links, invoices, or get the card in person whenever possible.
- Bundle small transactions: Try to combine multiple small charges into a single payment when it makes sense. Each transaction includes a fixed per-charge fee, so bundling reduces your overall cost.
- Add legal surcharges or card minimums: If local laws allow, add a small surcharge to card payments or set a minimum purchase amount for using cards. This can offset Square’s fees without hurting your bottom line.
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Square fee FAQs
Does Square refund processing fees?
No, Square does not refund processing fees when you issue a refund to a customer. Whether it is a full or partial refund, Square returns the full amount to the customer but keeps the original processing fee.
This means, as a seller, you will still be charged the transaction fee even if the sale does not go through. It is important to factor this into your pricing and refund policy to avoid taking a loss on returned payments.
Are Square fees tax‑deductible?
Yes, Square fees are tax-deductible. They count as a regular business expense and can be written off when you file your taxes. Just make sure to track them properly and report them under business expenses, typically as bank or merchant processing fees. This applies to both U.S. and Canadian business owners.
How long until Square deposits my money?
Square typically deposits your money by the next business day if the payment is completed before the daily cutoff (usually 5 p.m. PST). Payments made after that time or on weekends may take up to two business days. If you need funds faster, you can use same-day or instant transfers for a fee. These options can get money to your bank within minutes.
What is the fee difference between in-person and online Square transactions?
Square charges 2.6% + 10¢ per transaction for in-person payments (using a card reader) and 2.9% + 30¢ for online transactions. That’s a 0.3% higher rate and an extra 20¢ per transaction when payments are made online. The added cost reflects higher fraud risk and processing complexity with online payments.
Are there custom fee options on Square if my sales exceed a certain amount?
Yes. If your business processes over $250,000 in annual card sales with an average transaction above $15, you can contact Square to request custom pricing. This often means lower fees and personalized rates, but you need to reach out directly to Square’s sales team to negotiate.
