Include Payment Processing Fees in Photography Pricing

Summary

Payment fees belong in the model as an explicit cost, not as a hidden guess. Enter a percentage fee, a fixed fee, and the number of transactions expected for the modeled revenue. Calculate both components, show the result separately, and use the processor terms or statement that applies to your account and payment method.

PortraitPace does not store a universal fee rate. Public pricing can change, and a transaction may have conditions that differ from a simple published example. The linked Stripe Canada page is a source to review, not a value automatically inserted into a calculator.

Identify the modeled transaction pattern

Define the revenue boundary first: one portrait session, one mini-session event, or one package in an annual plan. Record whether clients usually pay once or in multiple installments. A fixed fee applied to every transaction means that two payments can cost a different amount from one payment, even when total collected revenue is unchanged.

Use this formula:

processing fees = collected revenue × percentage fee
                  + fixed fee × transaction count

Enter the percentage as a decimal in manual calculations. For example, 3% is 0.03. In the PortraitPace interface, enter the displayed percentage value as instructed by the field label.

The calculation is intentionally narrow. It may not capture refunds, disputes, international cards, currency conversion, special payment methods, invoicing products, taxes on fees, or account-specific terms. Add those costs separately when they are material and supported by your records.

Solve for required revenue

Simply adding a percentage fee to a target can understate required revenue because the fee is also charged on the added amount. When percentage fee r is below 100%, use:

required revenue =
  (target owner earnings + direct costs + allocated overhead
   + fixed fee × transaction count)
  ÷ (1 − percentage fee)

This relationship is used after the session hours and owner-earnings target are defined. If a target is hourly, multiply it by total business hours first. If the fee percentage is zero, the denominator is one. At or above 100%, the model is invalid.

For break-even revenue, remove target owner earnings from the numerator. For a mini event, payment fees are subtracted from modeled event revenue. For package contribution, fees are subtracted at the package level before calculating a weighted mix.

Synthetic worked example

Synthetic scenario — invented values for product demonstration and QA. Not a US or Canadian market benchmark. A family session collects 600 CAD in two transactions. The user enters a 3% modeled fee and a 0.30 CAD fixed fee per transaction. Percentage fees are 18 CAD and fixed fees are 0.60 CAD, for total modeled processing fees of 18.60 CAD.

If the same invented revenue arrives in one transaction, the modeled fee is 18.30 CAD. If the user switches the calculator label from CAD to USD, PortraitPace does not convert 600 or any cost. The user must explicitly retain and relabel the numeric values or clear monetary inputs. This example demonstrates arithmetic only and does not state Stripe’s current fee for that transaction.

Verify instead of assuming

Review the processor’s official page, account pricing, contract, and recent statements. Confirm which amount the percentage applies to and how fixed charges appear. Preserve the date and source in a planning note. If actual fees vary, compare the planned amount with several completed transactions rather than overwriting the original assumption.

Do not infer tax treatment from the planning model. The IRS and CRA links above provide starting points for business records and income or expenses, but a qualified adviser should address your facts. Keep sales tax, GST/HST, owner income tax, exchange fees, refunds, disputes, and processor policy decisions outside the simplified fee unless you have explicitly modeled them.

Model fees in Session Pricing & True Hourly Earnings, Mini Session Profit & Capacity, or Annual Booking Goal & Package Mix. Each tool keeps the fee assumption visible beside the result.