Why Your Standard Invoice Amount Might Be Costing You Profits
Most freelancers set their rates and never think about fees — until they realize they've been underpaying themselves for years.
Annual Fee Loss at Different Billing Volumes
$900
lost on $30k/yr
$1,800
lost on $60k/yr
$3,000
lost on $100k/yr
Based on standard Stripe rate of 2.9% + $0.30 per transaction.
Setting your invoice rates is one of the most important financial decisions you make as a freelancer or small business owner. But most people completely forget to factor in payment processing fees when they set those numbers — and it costs them thousands of dollars every year without them even realizing it.
The Silent Profit Killer
At a 2.9% processing rate, every $100 you invoice costs you $2.90 in fees. On a $100,000/year business, that's $2,900 you're effectively donating to Stripe, PayPal, or Square every single year — money that was never part of your business plan.
Three Strategies to Fix Your Pricing
Build a 3% Buffer Into Your Hourly Rate
The simplest fix: add 3% to every rate you publish. If your hourly rate is $100, charge $103. Your client will rarely notice the difference, and you'll fully cover the cost of card processing on every invoice.
Use Reverse Calculation on Every Invoice
Before you send an invoice, run a reverse fee calculation. Enter the net amount you want to receive, and the calculator will tell you the exact gross amount to invoice so you receive every dollar you're owed.
Offer a 'Bank Transfer Discount'
Offer clients a 2% discount for paying via ACH bank transfer (which costs you ~0.8%). You save 2.1% per transaction, the client saves 2%, and both parties win. Frame it as a discount, not a surcharge.
What About Long-Term Contracts?
If you're signing a multi-month retainer with a client, fees compound over time. A $5,000/month retainer paid by credit card costs you $145.30/month in fees — that's $1,743.60/year on a single client relationship. Always run these numbers before you finalize any contract.
Run the reverse fee calculation on your next invoice and find out exactly what to charge to get the number you want deposited.
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