Shopify Transaction Fees Explained: Every Fee, Every Plan, No Confusion

The Two Fees Most Sellers Confuse

When sellers ask "what are Shopify's fees?", they are usually thinking about one number. The reality is that there are two completely distinct fee types that serve different purposes, go to different parties, and apply under different conditions. Conflating them is one of the most expensive mistakes a Shopify seller can make.

Here is the distinction in plain terms:

The critical point: if you use Shopify Payments, Shopify waives its transaction fee entirely. You pay only the processing fee to Shopify Payments. If you use any other processor — Stripe, PayPal, Square, or anything else — you pay both the processing fee to that processor and Shopify's transaction fee on top. Two separate fees, two separate parties.

Shopify Fees by Plan: The Complete Picture

Here is every Shopify plan with its transaction fee, processing fee (when using Shopify Payments), and monthly cost as of 2025:

The "Double Fee" Trap: A $100 Sale Side-by-Side

Let's run the exact math on a $100 sale using three different payment setups on a Basic plan ($39/mo). This is where the true cost becomes visible:

Using PayPal instead of Shopify Payments on a Basic plan costs you $2.29 more per $100 sale. That might sound small until you run it at scale. At $10,000/month in revenue, that difference is $229/month — more than the cost of the Basic plan itself. At $50,000/month, it is over $1,100 per month being left on the table.

This is not a quirk or loophole — it is intentional product design. Shopify waives the transaction fee as an incentive to use their own payment system. If you have access to Shopify Payments in your country and are still routing orders through PayPal by default, you are paying a silent tax on every single order.

The True Annual Cost of Using a Third-Party Processor

Here is what the transaction fee costs at different revenue levels, assuming you're on the Basic plan (2% transaction fee) and using a third-party processor when Shopify Payments is available to you:

These numbers assume you have access to Shopify Payments. If you do, the math for switching is brutally simple: the only reason to stay with a third-party processor at significant revenue is a specific business reason — accepting a payment type Shopify Payments doesn't support, operating in a country where Shopify Payments isn't available, or satisfying a preference for a specific financial relationship. For most small sellers, there is no such reason. The transaction fee is pure friction.

The Plan Upgrade Break-Even: When Does Moving from Basic to Shopify Pay Off?

This is one of the most practically useful calculations a growing Shopify seller can run. The Shopify plan ($105/mo) charges a 1% transaction fee on third-party processors — half the Basic plan's 2%. But it costs $66 more per month. At what revenue level does the lower transaction fee offset the higher subscription cost?

The break-even formula (comparing Basic at $39/mo + 2% vs Shopify at $105/mo + 1%):

Break-even revenue = Plan cost difference ÷ Transaction fee rate difference
= ($105 − $39) ÷ (2% − 1%)
= $66 ÷ 0.01
= $6,600/month

At $6,600/month in revenue processed through a third-party processor, the Shopify plan costs exactly the same as the Basic plan. Above that level, the Shopify plan is cheaper. Below it, Basic wins.

The same logic applies to the Advanced plan vs Shopify plan:

Break-even = ($399 − $105) ÷ (1% − 0.5%) = $294 ÷ 0.005 = $58,800/month

What the Starter Plan Is Actually For

The Starter plan ($5/mo) deserves a separate mention because it is widely misunderstood. It is not a stripped-down storefront plan. It is designed for selling via social media, messaging apps, and simple payment links — not a full online store. It carries a 5% transaction fee when using third-party processors, which is steep. For any seller with a real product catalog and a meaningful volume, the Starter plan is almost never the right choice economically. At $2,000/month in sales, the 5% transaction fee alone is $100 — 20x the plan cost. Upgrading to Basic ($39/mo, 2%) would save you $60/month in transaction fees alone at that volume.

Shopify Payments: The Full Picture

Shopify Payments uses Stripe's infrastructure under the hood in most markets. When it is available to you, the economics are almost always favorable over running Stripe directly — because with Shopify Payments you eliminate the transaction fee entirely. Stripe's processing rate (2.9% + $0.30 on the Basic plan equivalent) is identical to what you would pay Shopify Payments, but Stripe as a third-party processor attracts Shopify's additional transaction fee on top.

Shopify Payments is currently available in: United States, Canada, United Kingdom, Australia, Ireland, New Zealand, Singapore, Hong Kong, Japan, Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Portugal, Romania, Spain, Sweden, Switzerland. If your country is not on this list, you will always pay both fees and should factor this into your plan selection and pricing strategy.

How Shopify Fees Stack Against Etsy Fees

For sellers running both an Etsy shop and a Shopify store — which is an increasingly common strategy — understanding how the two fee structures compare is essential to knowing where each sale is actually more profitable.

On a $100 sale with Shopify Payments, you keep $96.80. On a $100 Etsy sale without offsite ads, you keep $90.05. On a $100 Etsy sale with offsite ads at 15%, you keep $75.05. The same product sold through Shopify with Shopify Payments is worth meaningfully more per sale — but Etsy provides the traffic. This is the fundamental tension every multi-channel seller navigates.

The practical implication: a seller adding Shopify to their existing Etsy business should not assume their Shopify margins are automatically higher just because Shopify's fee rates are lower. Shopify's traffic acquisition costs (ads, SEO investment, email, social) replace what Etsy charges for distribution. The true comparison requires accounting for both the platform fee and the customer acquisition cost on each channel.

A Real-World Fee Calculation: $75 Product, Three Scenarios

You sell a handmade ceramic mug for $75. Here is your fee breakdown across three payment setups on the Basic plan:

The difference between Shopify Payments ($2.48) and PayPal ($4.42) is $1.94 per order. If you sell 300 mugs per month, that is $582/month in unnecessary fees — or $6,984 per year. For most small business owners, that is a significant line item.

Common Shopify Fee Mistakes

Mistake 1: Assuming all fees are in one place

Shopify's transaction fee is deducted from your Shopify balance before payout. Your payment processor's fee (Stripe, PayPal) is deducted separately on their side before any funds reach Shopify. This means you need to look at two dashboards to see your full fee picture — or use a profit tracking tool that aggregates both.

Mistake 2: Keeping the default payment provider from setup

When you first set up Shopify, you go through a flow that may leave PayPal or a local third-party processor as your primary payment method even if Shopify Payments is available in your country. Many sellers never revisit this setting. If you set up your store before Shopify Payments was available in your region and it has since launched, you may be on the wrong setup right now.

Mistake 3: Not accounting for plan upgrade timing

Shopify charges plan fees on a monthly or annual billing cycle. If you upgrade mid-month, you are pro-rated but you will pay the new plan rate immediately. Sellers who upgrade to take advantage of lower transaction fees should time this with their revenue growth so they are not paying the higher plan cost before they have the volume to justify it.

Mistake 4: Forgetting Shopify's currency conversion fee

If you sell internationally and your Shopify Payments account is in one currency, Shopify charges an additional 1.5% currency conversion fee when a customer pays in a different currency. This is a separate fee that many sellers discover only after looking at their detailed payout reports.

Fee Impact on Your Pricing Strategy

The practical implication of understanding your exact fee structure is that it should directly influence your pricing. A seller on the Basic plan using Shopify Payments has an effective fee rate of about 3.2–3.5% depending on price point. A seller on the same plan using PayPal has an effective rate of about 5.5–6%. These two sellers need to price differently to achieve the same net margin.

To hit a $20 net profit on a product with $30 COGS, with a 3.5% effective fee rate:

Required price = (COGS + Target profit) ÷ (1 − Fee rate)
= ($30 + $20) ÷ (1 − 0.035)
= $50 ÷ 0.965
= $51.81 → price at $52 or $51.99

The same seller using PayPal (5.9% effective rate):

= $50 ÷ (1 − 0.059) = $50 ÷ 0.941 = $53.14 → price at $54

A $2 difference in required price may seem small, but it affects conversion rate on price-sensitive items and accumulates across every SKU and every order. Sellers who do not account for their specific payment processor's fee in their pricing are either leaving margin on the table or accidentally underpricing.

Quick Reference: What You Actually Pay Per $100 Sale by Plan and Processor

The absolute fee gap narrows as you upgrade plans — both because the transaction fee rate falls and because the processing rate itself declines. This is the economic logic of the plan ladder: higher-volume sellers who generate enough revenue to justify a higher plan cost get lower fees in return.

The Honest Bottom Line

Shopify's fee structure is more nuanced than most sellers realise when they sign up. The headline "2.9% + $0.30" from a Google search gives you only half the picture — it tells you what you pay the payment processor, not whether you are also paying Shopify a separate 2% on top.

The core rules are simple once you know them: use Shopify Payments if you can, upgrade your plan when your monthly revenue exceeds the break-even threshold, and account for currency conversion fees if you sell internationally. Sellers who apply all three rules consistently will pay materially less in fees than those who don't — without changing their prices, products, or customers at all.

The hardest part is not understanding the rules — it is tracking them order by order, every month, across different payment methods and order sizes. That is where automated profit tracking earns its keep.