The five fees on a typical UK order
A UK seller with a UK bank account normally sees five charges against every order in the Payment account:
- Listing fee: $0.20 (about £0.15 at current rates) when you publish or renew a listing, and again for each extra unit sold from a multi-quantity listing. Listings last four months.
- Transaction fee: 6.5% of the item price plus the postage and gift wrap you charge.
- Payment processing: 4% + £0.20 per order for UK bank accounts, on the full order total.
- Regulatory operating fee: 0.48% of item price plus postage. This went up from 0.32% on 22 June 2026.
- VAT: 20% added to Etsy’s seller fees.
Offsite Ads (15% or 12%) appear only on orders that came from one of Etsy’s external adverts, and the 2.5% currency conversion fee appears only if you list in a currency other than pounds.
Why UK sellers pay VAT on Etsy fees
Etsy supplies its services to you from outside the UK, so it charges UK VAT on its seller fees. This applies whether or not you are VAT registered. If you are registered, you can generally reclaim that VAT as input tax using the VAT invoice in your Shop Manager. If you are not registered (most small shops are under the £90,000 threshold), the VAT is a straight cost and should be in your pricing. The calculator includes it by default. Untick it if you reclaim it.
Worked example: £20 necklace with £3.99 postage
| Order total (item + shipping) | £23.99 |
| Listing fee ($0.20, converted) | £0.15 |
| Transaction fee 6.5% | £1.56 |
| Payment processing | £1.16 |
| Regulatory operating fee | £0.12 |
| VAT on fees (20%) | £0.60 |
| Total Etsy fees | £3.58 (14.9%) |
| Profit after costs of £9.70 | £10.71 |
The headline 6.5% becomes about 15% once processing, the regulatory fee, the listing fee and VAT are added. The fixed parts (the £0.20 processing fee and the listing fee) matter less as the price rises.
Same order via an Offsite Ad
| Order total (item + shipping) | £23.99 |
| Listing fee ($0.20, converted) | £0.15 |
| Transaction fee 6.5% | £1.56 |
| Payment processing | £1.16 |
| Regulatory operating fee | £0.12 |
| Offsite Ads 15% | £3.60 |
| VAT on fees (20%) | £1.32 |
| Total Etsy fees | £7.90 (32.9%) |
| Profit after costs of £9.70 | £6.39 |
One ad-attributed sale more than doubles the fees on this order. That is why a price that only just works without Offsite Ads is risky for a shop that is still enrolled.
What changed in 2026
The main change for UK shops this year is the regulatory operating fee, which rose from 0.32% to 0.48% on 22 June 2026. On £10,000 of sales that is an extra £16 a year before VAT. It is small, but many older calculators still use 0.32%. The 6.5% transaction fee, $0.20 listing fee and UK processing rate of 4% + £0.20 are unchanged.
Keeping records for Self Assessment
Etsy fees are an allowable business expense. Download your monthly statements from Shop Manager, then record fees, refunds, postage and materials as you go so your Self Assessment figures are easy to add up. A simple spreadsheet is enough for most sole traders.
Sources
- Etsy Fees & Payments Policy (listing fee, 6.5% transaction fee, 2.5% currency conversion, Offsite Ads)
- Etsy Payments Policy, section 9: payment processing fees by bank country
- Etsy Help: What are Payment Processing Fees for Selling on Etsy?
- Etsy Help: What is a Regulatory Operating Fee? (rates effective 22 June 2026)
- Etsy Community announcement: Regulatory Operating Fee updates (22 June 2026)
- Etsy Help: How Etsy’s Offsite Ads Work (15% / 12%, $100 cap)
All rates checked against these pages on 18 October 2026. Etsy can change fees at any time; your Payment account is the final word.
Run your own numbers
Plug in your real price, costs and country. Every fee updates as you type.
Open the Etsy fee calculatorFrequently asked questions
What percentage does Etsy take in the UK?
There is no single rate. On a typical £20–£30 order with no Offsite Ads, fees including VAT come to about 14–16% of the order total. Very cheap items pay a higher percentage because of the fixed fees.
Is the regulatory operating fee charged on postage?
Yes. Etsy charges it on the item price plus postage and gift wrap, the same base as the transaction fee.
Can I avoid Etsy’s payment processing fee?
No, not on Etsy Payments orders. The rate depends on where your bank account is, not on where the buyer is, for UK accounts.
Are Etsy fees tax deductible in the UK?
Etsy seller fees are generally an allowable expense for sole traders and companies. If you are not VAT registered, include the VAT you paid in the expense. Check GOV.UK or an accountant for your situation.
Last reviewed: October 2026. General information only — check providers' official sites for current features and pricing.