For the supported US scenario, buyer sales tax collected by Etsy is not seller revenue. Etsy's transaction fee excludes US sales tax, while Etsy Payments processing is calculated on a gross amount that can include applicable tax. Enter the receipt's sales-tax amount separately instead of adding it to price or operating cost.
1. The short answer: not the same answer for every fee
If Etsy collects marketplace sales tax from the buyer, that tax is generally remitted rather than paid to the seller as order revenue. The transaction fee is based on the seller's applicable order revenue and excludes US sales tax in the supported model.
Payment processing is different. For a US bank account, the processing rate is 3% plus $0.25 per order, and the percentage base can include applicable sales tax. That means a tax amount can create a small processing debit even though the tax is not your profit.
2. Keep the three amounts separate
| Line | Seller revenue? | US sales tax included? | MarginGauge treatment |
|---|---|---|---|
| Buyer sales tax collected by Etsy | No | It is the amount collected | Pass-through receipt amount |
| Etsy transaction fee | Fee debit | No, excluded from the supported US base | 6.5% of seller order revenue |
| Etsy Payments processing | Fee debit | Applicable tax can enter the percentage base | 3% of processing gross plus $0.25 |
Do not subtract buyer sales tax as though it were product cost. It was never part of seller revenue in this model. Do not omit it from the processing base when the Etsy receipt shows Etsy-collected tax included in the payment calculation.
3. A $36 order with $2.40 of buyer sales tax
Assume a $30.00 item, $6.00 buyer-paid shipping, and $2.40 of Etsy-collected sales tax. Product cost is $10.00, packaging is $1.00, and the actual shipping label is $5.00. There is no discount, gift wrap, personalization, advertising allocation, or Texas seller-fee tax.
Seller order revenue is $36.00. The tax is $2.40 and is not seller revenue. Transaction fee is $2.34; payment processing is $1.40 because the processing gross includes the tax; listing allocation is $0.20.
| Scenario | Tax | Net Etsy fees | Operating costs | Contribution profit |
|---|---|---|---|---|
| With $2.40 sales tax | $2.40 | $3.94 | $16.00 | $16.06 |
| No sales tax | $0.00 | $3.87 | $16.00 | $16.13 |
The $2.40 tax reduces contribution by $0.07 in this example, because only the extra processing percentage is a seller fee. The tax itself does not inflate the $36.00 seller-revenue line and does not increase the 6.5% transaction fee.
4. Texas seller-fee tax is a separate line
Do not confuse buyer sales tax with tax on Etsy seller fees. Etsy's Texas guidance says a Texas seller can be charged tax on certain seller fees, effective October 1, 2025. In the supported MarginGauge model, the line is 6.25% of 80% of the rounded transaction fee, then rounded to cents as a disclosed product convention.
This Texas seller-fee tax is not buyer sales tax and is not included in the ordinary transaction-fee answer above. Select the seller's state and review the receipt before treating it as a real debit.
5. Enter sales tax in the calculator
Open the Etsy Profit Calculator and enter the amount Etsy collected under Sales tax collected by Etsy. Keep the item price and buyer-paid shipping in seller revenue, but leave the tax out of product costs, packaging, and fulfillment cost.
- Use the receipt amount when Etsy collected marketplace sales tax.
- Use zero when the order has no collected sales tax.
- Review the transaction fee and processing base separately.
- For a Texas seller, check the distinct seller-fee tax line.
- Do not treat the result as a state filing calculation.
For a complete fee map, read Etsy Fees for US Sellers. For shipping-base details, see Does Etsy Charge Fees on Shipping?. To understand contribution profit, read How to Calculate Etsy Profit Per Order.
Model the tax separately
Keep pass-through sales tax separate from seller revenue and see the processing-fee effect on contribution.
Open the Etsy Profit CalculatorOfficial sources and limits
- Etsy Fees & Payments Policy: transaction-fee base and sales-tax exclusion; reviewed September 25, 2026.
- What are Payment Processing Fees for Selling on Etsy?: US processing rate and applicable-tax base; reviewed September 25, 2026.
- How US State Sales Tax and Fees Apply to Etsy Orders: marketplace collection context; reviewed September 25, 2026.
- What are Sales and Use Taxes on Seller Fees in Texas?: separate Texas seller-fee tax line, effective October 1, 2025; reviewed September 25, 2026.
Review dates record MarginGauge's source check; they do not replace Etsy's update dates. Examples use the calculator's disclosed line-level half-up cent rounding. Etsy controls tax collection, fee debits, refunds, and eligibility. MarginGauge is independent of Etsy, Inc. Corrections: [email protected].