How much are Etsy fees for UK sellers? Updated for 2023
8 March 2022
woman sitting at a desk with a laptop and using a calculator to work out how much are Etsy fees

How much are Etsy fees for UK sellers? Updated for 2023

Mar 8, 2022 | Etsy

** Info reviewed & updated 06Dec2023 **

Etsy fees can be complicated to get your head around – so this article is a breakdown of what those cover. When starting out or even when the fee system changes, as happens occasionally (hence I make sure to check and update this blog article regularly!), it’s so important to have a clear understanding.

With this in mind, you can set your pricing structure to cover these costs.
Without that clear understanding, Etsy’s charges feel confused, made up of many different elements. For many, it can feel like there are hidden fees, which isn’t helped by the fact that costs are made up of both percentage-based as well as fixed fee components. (In other words, the fees vary for different priced products.)

Good news: Etsy fees can easily be factored in to your costs. Once you break them down.

It’s no surprise the whole Etsy marketplace can end up being pretty off-putting for sellers.
With the explanation in this article, you can make sure your pricing structure is in line with what you want the profit to be after those fees and other costs are taken off.

This blog is full of meaty info… we’ll cover…
✅  Etsy fees – are they a lot, or not?
✅  What are the different elements that make up Etsy fees
✅  If you’ve not reviewed your pricing since before Etsy’s last big fee increase kicked in (11 April 2022) here’s how that’s impacting your bottom line.
✅  My easy calculation table! Includes examples of how fees stack up and what that represents as a proportion of your listing price
✅  Key takeaways as a summary. The important bits to remember

Let me begin by saying that I believe Etsy fees are worth it! The advantage of having an enormous audience of potential buyers viewing the site, knowing and trusting it to find quality artisan makes and for its secure payment system and customer service processes, an easy-to-use backend and upload system… these are all huge plus-points that we, as sellers, pay for through the fees.
In fact, I prefer to see fees not as a cost that we must pay for, but as an investment that serves us.

Other platforms may offer lower fees, sure, but do they offer the same returns? The awareness levels and audience size that Etsy boasts are certainly not to be beaten, and the assurance offered by a large and well-known organisation (for both sellers and buyers!) cannot be underestimated.

Similarly, bypassing the use of a marketplace platform and using your own channels – whether that’s relying on your own website, social media pages for direct selling and/or in-person popups and fairs – all of those definitely aren’t cheap.
Web hosting costs, security certification, web design and maintenance, SEO costs, greater in-bound marketing and/or advertising to generate the same amount of leads… the financial (and time) implications behind these factors, and more, will quickly add up.

In other words, that old saying ‘you get what you pay for’?…

For me, it holds true and that’s why I use Etsy.

So let’s break down what the fees cover; what’s mandatory and what’s not.
Having a shop on Etsy is free. There’s no registration fee, membership or subscription to pay for.

There are 4 elements that you *do* have to pay. And VAT is also payable on each one of those 4, so you’ll see that I’m breaking each one down, as a) the basic cost and then, b) the VAT to add on for that component.

1. Listing fee.

a) Every product unit will cost you 20c to list. That’s around 15p. This is the only mandatory charge incurred before you sell your item, and is fixed for every product, no matter what its value. The listing fee is charged on every item for the 4month listing period. If it re-lists (either auto or manual) then the fee will apply again, and if you have multiples of the item (quantity more than 1), the same fee applies for every single one of those units, even within the same listing.

b) VAT on the Listing fee – yes, all of your selling activity is subject to tax. (You can finding out more about registering your business for VAT here.) The current VAT rate is 20% so you pay that rate on business charges, including the Listing fee.
20% of the 15p listing fee is 3p.

2. Transaction fee.

a) This is Etsy’s cut for you to use their platform. It depends on the cost of the item, so is currently charged at 6.5% of the total sale (item cost+shipping+wrapping costs).
You will be charged this fee when the item sells, not before.

b) VAT on the Transaction fee – charged at 20% of 2a).

3. Regulatory fee.

a) This is the fee you pay for use of an online sales platform. It is the law to pay this – a kind of digital sales tax, so everyone selling online in the UK has to pay it. Whatever platform you use. Though some platforms do absorb it into other usage fees so in those cases, it’s ‘hidden’.
Etsy charges 0.32% of the total sale (item cost+shipping+extras, such as gift wrapping costs).

b) VAT on the Regulatory fee – charged at 20% of 3a).

4. Payment processing fee.

a) This is the fee incurred for using Etsy’s money-transfer system. If you used Paypal for your business, you’d have to pay commission; the Etsy Payments system is similar. For UK sellers, this charge comes in at: (4% of total sale + 20p).

b) VAT on the Payment processing fee – 20% of 4a).

Those 4 are the mandatory charges.
There are other optional fees too. The main ones are as follows:

Offsite ads – adverts which you pay for extra visibility and set up by Etsy, to promote your listings on other sites outside Etsy, eg in Google ads, Facebook ads etc. Etsy recognises there is a chance to capitalise on people interested in your item outside of the Etsy search, so it will show your item in those cases.
The fee for offsite ads is 15% of the total sale (item cost+shipping+wrapping costs) and only applies if the sale was made as a direct result of the buyer clicking on the specific ad.
All sellers are opted in to the offsite ad system, automatically.
Sellers who make less than $10,000+ (approx. £7,800+) can opt out.
> TIP! Opting out is one way to reduce the fees you might pay. Use your Settings in the Shop Manager to choose your offsite ads preference if you prefer your listings not to benefit from this extra visibility.
Sellers who make over $10,000+ (approx. £7,800+) are not eligible to opt out, and the fee is reduced to 12% for businesses with this higher turnover.

Etsy ads – a different type of advert which you pay for, still enabling extra visibility on your item(s). This allows your product to appear higher up in the search results within Etsy. You are paying for the product to have more prime real estate when a customer searches.
Your fee for this depends on what you want to pay – pay more and you show up more. Pay less, show up less. The rate of the fee depends on factors including the popularity of the search term and is only payable if a customer clicks on that promoted listing and then goes on to purchase. (It’s called Pay Per Click.)

Etsy Plus – this upgrade service is paid for by monthly subscription ($10/m, approx. £7.80) within Etsy. It gives sellers extra benefits and functionalities, such as a set number of pre-paid listings, ad credits and greater shop customisation. There’s no evidence that listings in Etsy Plus stores enjoy better visibility than ones not in Etsy Plus. Find out more about the service here

Taking a look at what those percentages and fixed-fee amounts relate to then:
Consider an item listed for £12 with free shipping …
1a) + b) Listing fee charge =
15p + 3p for VAT = 18p.

2a) + b) Transaction fee (6.5%) =
78p + 16p for VAT = 94p

3a) + b) Regulatory fee (0.32%) =
4p + 1p for VAT = 5p

4a) + b) Payment processing fee (4% +20p) =
68p + 14p for VAT = 82p

Total fees for an item priced £12 with free shipping = 18p + 94p + 5p + 82p = £1.99
So your Etsy payout will be £10.01.
Fees on this item account for 16.5% of the original price you listed.
And you’d still have to cover the packing and shipping costs out of that £10.01 payout, remember 😉

Prior to 11 April 2022, the Transaction fee was less than 6.5% (and corresponding proportionate VAT), so you may still find articles and blogs online which don’t take this current rate into account!
Do check those information sources carefully – it’s why I make sure to always check this blog and keep it updated for current fee rates!
**Last checked 06Dec23**

That increase (5% -> 6.5%) had a significant effect on overall profitability.
If you’re an Etsy seller and you haven’t fully reviewed your pricing structure since before that increase became applicable, I definitely recommend you take care to do some calculations. It’ll be worthwhile to see what effect this increase has meant for your margins on different products so you can see whether to adjust your pricing to suit.

At any time:
YOU are in control of what you charge, so if you don’t want to take the hit, and don’t want to absorb the fees – you know what to do.
Up your pricing to cover these costs.

 

Look at this table to see how to calculate fees for your own listings. Grab a calculator and just substitute in your product price for the value “X” in the first column. I recommend you use a notebook to help with breaking down each component of the overall fee so you can tally up the 4 elements and the separate VAT for each. Take it steady and break up each ‘stage’ to end up with a really solid feel for where your fees come from!
Eg to calculate A, start by working out 2a). From that you can work out 2b). Add together 2a) and 2b) to get A. And so on.

Scroll across the table too, to check out the examples to see how the fees paid varies for different product price points – typically around 15-17% for lower-price points and then work out more cost-effective for more pricey ones. Also (if you haven’t updated your pricing since pre-April22), compare how the Transaction fee increase has affected things, and how the same item incur extra charges when sold via an offsite ad, and how you’ll also pay Etsy fees on shipping an item. Yes, Etsy charges you more if you charge for shipping.

Listing Fee
1a) + 1b)
Transaction Fee
2a) + 2b)
Regulatory Fee
3a) + 3b)
Payment Processing Fee
4a) + 4b)
Offsite Ads Fee
a) + b)
TOTAL FEE
£
TOTAL FEE as a
% of the price
X = Item price + Shipping +
Extras eg gift wrap, personalisation etc
15p
+
3p for VAT  =  18p

(0.065  x  X)  2a
+
(0.2  x  2a)  =  A

(0.0032  x  X)  =  3a
+
(0.2  x  3a)  =  B

(0.04  x  X)  4a
+
(0.32  x 4a)
+
20p  =  C

(0.15  x  X)  =  offsite
+
(0.2  x  offsite)  =  D
18p + A + B +
C + =  E
(E/X)  x 100  
Example item:
£20, free shipping
(BEFORE 11 April ’22)
15p
+
3p for VAT  =  18p

(0.05  x  20)  =  £1
+
(0.2 x 1)  =  £1.20

(0.0032  x  20)  =  6p
+
(0.2 x 6p)  =  8p

(0.04  x  20)  80p
+
(0.2 x 80p)
+
20p  =  £1.16

n/a

0

18p + £1.20 + 8p +
£1.16 + =  £2.62

(2.62/20) x 100
= 13%

Example item:
£20, free shipping
(SINCE 11 April ’22)

15p
+
3p for VAT  =  18p
(0.065  x  20) = £1.30
+
(0.2 x 1.30)  =  £1.56

(0.0032  x  20)  =  6p
+
(0.2 x 6p)  =  8p

(0.04  x  20)  =  80p
+
(0.2 x 80p)
+
20p  =  £1.16

n/a

0

18p + £1.56 + 8p +
£1.16 + =  £2.98

(2.98/20) x 100
= 14.9%

Example item:
£20, free shipping
(Sold via offsite ad)
15p
+
3p for VAT  =  18p

(0.065  x  20) = £1.30
+
(0.2 x 1.30)  =  £1.56

(0.0032  x  20)  =  6p
+
(0.2 x 5p)  =  8p

(0.04  x  20)  =  80p
+
(0.2 x 80p)
+
20p  =  £1.16
(0.15  x  20)  =  £3
+
(0.2 x 3)  =  £3.60

18p + £1.56 + 8p +
£1.16 + £3.60 = £6.58

(6.58/20) x 100
= 32.9%

Example item:
£45, free shipping
15p
+
3p for VAT  =  18p

(0.065  x  45)  £2.93
+
(0.2 x 2.93)  =  £2.70

(0.0032 x  45)  =  14p
+
(0.2 x 14p)  =  17p

(0.04  x  45)  =  £1.80
+
(0.2 x 1.80)
+
20p  =  £2.36
n/a

0

18p + £3.51 + 17p +
£2.36 + =  £6.22

(6.22/45) x 100
= 13.8%

Example item:
£45, +£10 shipping
15p
+
3p for VAT  =  18p

(0.065  x  55) =  £3.58
+
(0.2 x 3.58)  =  £4.29

(0.0032  x  55) = 17.6p
+
(0.2 x 17.6p)  =  21p

(0.04  x  55)  =  £2.20
+
(0.2 x 2.20)
+
20p  =  £2.64
n/a

0

18p + £4.29 + 21p +
£2.64 + =  £7.32

(7.32/55) x 100
= 13.3%

Scroll here…

H
I
YOUR KEY TAKEAWAYS:

– Etsy fees can soon take you by surprise unless you’ve bothered to do the calculations!
You are 100% in control of whether you absorb those as a business expense or pass them on to your customer. Customers aren’t daft, they know that many different costs affect how items are priced; it’s expected.
If you don’t want to pass on those charges in your pricing that’s ok, but there’s zero justification for any surprise or negativity when you make that as an informed choice 😉
Edit your listings to suit.

– Start to see Etsy fees as an investment.
I believe they represent good value in relation to the benefits returned. Many, many costs should factor into your product pricing calculation – materials, time, fees, and other business expenses, not least, the profit you want to takeaway, to name a few!
Business success comes from knowing all the numbers, not by keeping your head in the sand. Understand what value fees represent within that and get help if you need to.

– The % paid in fees will vary.
This difference is more keenly felt on lower-cost items. This is because the fixed fee elements (Listing fee and part of the Payment Processing fee) take up a greater proportion of the item cost for low-cost items. A high-cost item can ‘cushion’ the fixed fees more easily, so the overall fee total feels more affordable.
I make sure to calculate the fee for every product I list and fully understand the profit margin for each.

– Offsite ads can add a huge amount onto the fees that sellers pay.
Do your sums to be mindful of what that extra lump looks like. Then you won’t be caught out if your item incurs extra costs due to the success of an offsite ad. You are in control of that by opting out/in again, at any time, as needed.

Hopefully this will be helpful for you to check over your listing prices and being more aware of the profit margins concerned.
Leave a comment if you have any questions about Etsy selling, or about pricing confidence.
Until next time,
Ruth

PS. When setting my prices, I’ve created a formula that takes *all* the factors into account. Not just your materials, fees and your time. If you want to learn more about how I price for profitability, it’s something I can share as part of an Etsy coaching intensive.
Email me if you want info on the options.

12 Comments

  1. Jenny

    I earn more than the personal tax allowance but less than the VAT limit per year.

    If I replace some of my income with an etsy shop, do I pay tax on the amount before or after the etsy fees?

    I hope it is after, because I want to keep my expenses as low as possible. I don’t mind paying for things like etsy listing fees or optional etsy ads as expenses. I currently have really low expenses as a freelance translator, and I’d like to keep it that way as my living costs are high.

    Also, is it possible to opt out of etsy offsite ads in the UK if you earn over the 10,000 dollar equivalent?

    Sorry if these are silly questions, I can’t seem to find the answers online! And I can’t email etsy because I haven’t set up my shop fully yet.

    Reply
    • admin

      No problem with the questions 😉 I’m happy to answer as far as I can!
      Any tax is only paid on income above the personal allowance, if your business isn’t registered for VAT. It doesn’t matter where that income comes from, so it can be from Etsy sales, or translation work, or anything else besides. Whether it’s ‘replacing’ your other income or not, it will all add up in the same ‘income’ pot. That total will grow when you get payouts from any income source, including Etsy (after the fees have been deducted).

      If you make over £85000 purely in your Etsy business, that’s different and you’d need to register the business to pay VAT on that income separately.
      So:
      your total self-employed earnings (from all sources, Etsy, translation work etc) – all business expenses and costs (for business purposes) = gross income.*
      Gross income – £125000 allowance = what you will get taxed on.

      * This equation is where it’s very helpful to understand what expenses are included, as those are what we say is ‘written off against tax’.
      If you need any tips for self-employed DIY accounting and bookkeeping I can really recommend a great tutor; she’s really helped me! Check out Yarka at Action Your Accounts, she’s so friendly and knowledgable. (On FB and IG).

      And no, you can’t opt-out of the offsite ads if you go over that threshold. USD 10000 is approx GBP8000 I think, and at that stage when you have to participate in offsite ads, you do at least get a reduced fee, compared with the usual fee for shops below-the-threshold. My (anecdotal) experience is that shops doing offsite ads get good results from them, so they more than pay for themselves 😉
      Hope this helps you Jenny, Ruth x

      Reply
  2. Peter Stevens

    This really helped me as I am just investigating selling on Etsy in the UK and most other articles are in USD

    Reply
    • admin

      It’s good to hear this Peter. All the best with your Etsy journey 🙂

      Reply
    • admin

      Thanks Scarlett, glad it has helped you 🙂

      Reply
  3. Sue

    Etsy has been charging me 6.5% of the total price + 6.5% shipping charge which makes it 13% is this correct?

    Reply
    • admin

      Not quite.
      6.5% of the purchase price + shipping costs makes up the Transaction cost (excl vat) certainly, and then there are the other elements added on top of that – which may or may not work out at another 6.5%, so overall it wouldn’t necessarily be 13% of the total.
      It might be, but most of the time it won’t, depending on the actual numbers involved.
      That’s why doing the calculation by the formula breakdown is going to be useful for you. It would definitely depend on your particular example.
      As you can see in my table, the 6.5%+vat of a £20 item is shown in red; it’s £1.56. Then the other elements for that item are 18p for listing fee, 6p for the regulatory fee, £1.16 for payment processing, (other elements coming to £1.40).
      Which isn’t the same as the 6.5%+vat and therefore doesn’t add up to make overall 13%.
      It really helps to go through each fee component for your item – not forgetting the +vat as you go – and then you’ll see what the total fee comes to.
      Hope this helps clarify it, thanks for reaching out Sue 🙂

      Reply
  4. Andrea

    Hi Ruth
    I need to decide whether to leave nuMonday and dust off my Etsy shop next month. I have left the local shop which was charging 35% commission due to several incidents which were damaging my sales there by the shop owner. Taking my 3 figure sales down to zero in a week and I have not recovered from it. Your blog article is excellent and I will try out your calculations based on my prices used in the local shop and see where I get to. You are right I saying you get what you pay for but nuMonday seemed right at the time 4 years ago but maybe not any more. Thank you for this article.
    Andrea

    Reply
    • admin

      Glad this helped you Andrea – hope you manage to make some more informed choices. Having too many eggs in any one basket/ one sales channel is definitely not a great approach, as you’ve found. Spreading the options across more assured channels will definitely help. Ruthx

      Reply
    • Turpin

      Thanks for a terrific – and clear – outline of the cost implications of going down the esty route. As a long time e-bayer I’ve been considering this platform for a while. Costs here seem fairly comparable. You have encouraged me to run some test selling. Many thanks.

      Reply
      • admin

        Thanks Andrea, it’s good to know you found this helpful. I hope you give it a try and figure out the pricing structure that works for you 🙂

        Reply

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