Understanding Shopify Tax transaction fees
On this page, you can learn more about Shopify Tax transaction fees, including eligibility requirements, initial sales exclusions, annual fee limits, and how these fees are applied and displayed on your Shopify bills.
On this page
- Overview of Shopify Tax transaction fees
- Eligibility criteria for Shopify Tax transaction fees
- Sales threshold based on store location
- Initial sales exemption from Shopify Tax transaction fees
- Annual limits on Shopify Tax transaction fees
- Summary of Shopify Tax sales threshold and transaction fee caps
- Understanding fee cap resetting and application
- Charges and display on your Shopify bill
Overview of Shopify Tax transaction fees
Tax transaction fees are applied to applicable orders using Shopify Tax and are charged separately from your Shopify subscription on your monthly invoice. Shopify Tax is available to all merchants that sell to customers in the United States (US), the European Union (EU), or the United Kingdom (UK). You can choose to use Shopify Tax in one or more of these regions.
Eligibility criteria for Shopify Tax transaction fees
Shopify Tax transaction fees display on your bill per order if all of the following are true:
- You're a merchant selling to US, EU, or UK customers.
- You collect tax in states or regions where you have tax liability.
- You've selected Shopify Tax as your tax service.
- Your store has made sales equal to or greater than the sales threshold, based on your store's location.
Sales threshold based on store location
The following table outlines the sales thresholds required for businesses based on their store locations, specifying the amounts and currencies applicable to each region.
| Store location | Sales threshold | Sales threshold currency |
|---|---|---|
| US | 100,000 | $ USD |
| EU | 100,000 | € EUR |
| UK | 100,000 | £ GBP |
| All other locations | 100,000 | $ USD |
Initial sales exemption from Shopify Tax transaction fees
You aren't charged for Shopify Tax until your store meets the sales threshold. After you surpass this threshold, a percentage fee will be applied to each order that collects sales tax. However, you will never be charged more than 0.99 per order in your store's billing currency.
Annual limits on Shopify Tax transaction fees
Understanding the fees associated with Shopify Tax is important for your businesses, especially based on their annual sales. The following are the fee structures for stores depending on whether their sales are below or above $100 million USD per year:
- Stores with sales under $100 million USD per year: You won't be charged more than 5,000 in your store's billing currency per year.
- Stores with sales of $100 million USD or greater per year: Custom pricing applies. Contact your Merchant Success Manager for more information.
Summary of Shopify Tax sales threshold and transaction fee caps
The following table summarizes the sales thresholds, pre-order fee caps, yearly fee caps, and the corresponding currencies for Shopify Tax based on different store locations.
| Store location | Sales threshold | Pre-order fee cap | Yearly fee cap | Sales threshold and fee cap currency |
|---|---|---|---|---|
| US | 100,000 | 0.99 | 5,000 per region where Shopify Tax is activated (US, EU, UK) | $ USD |
| EU | 100,000 | 0.99 | 5,000 per region where Shopify Tax is activated (US, EU, UK) | € EUR |
| UK | 100,000 | 0.99 | 5,000 per region where Shopify Tax is activated (US, EU, UK) | £ GBP |
| All other locations | 100,000 | 0.99 | 5,000 per region where Shopify Tax is activated (US, EU, UK) | $ USD |
Understanding fee cap resetting and application
The 5,000 fee cap on transaction fees resets each year and applies separately for each region where you use Shopify Tax, as well as for each individual store. This means that you could incur up to 15,000 in total transaction fees per store if you use Shopify tax in all 3 regions (US, EU, and UK).
Example 1: If you have one store in the US and use Shopify Tax to collect sales tax in all 3 regions, then your total tax transaction fees won't exceed $15,000 USD ($5,000 USD for each region).
Example 2: If you have two stores, Store A and Store B, both located in the UK and you're using Shopify Tax to collect sales tax in the UK and EU, then each store won't be charged more than £10,000 GBP in tax transaction fees (£5,000 GBP per region). Together, the total yearly limit for both stores will be £20,000 GBP.
Charges and display on your Shopify bill
If your store's total sales meet or exceed the fee threshold in your store's currency, then a percentage fee will be applied to transactions where tax collection is activated.