Card machine fees in the UK: what small shops pay and how much margin they take

Pay-as-you-go card machines charge UK shops 1.69% to 1.75% of every card payment: 1.69% at SumUp and 1.75% at Square and PayPal POS, with no monthly fee. Plans for steadier takings go lower: SumUp charges 0.99% on UK personal debit and credit cards for £19 a month plus VAT, and Dojo publishes a 1.2% blended rate, plus 5p a payment, for businesses taking under £100,000 a year on cards. You can't pass the fee on to customers paying with a personal card, so it comes out of your gross profit: on an item you sell for £20 that cost you £12, a 1.75% fee takes 35p of your £8 margin, or 4.4% of it.

The rest of this guide uses the same numbers to show what each way of paying costs, what VAT does to the fee, what a month of fees adds up to, why your payouts come in under your takings, and how to find the rate you're really paying.

What do card payments cost a small shop in the UK?

These are the rates providers published as of October 2026. Pay-as-you-go readers charge one percentage on every card, with no fixed fee per payment. Banks and other acquirers that rent you a terminal on a contract usually charge a different rate for each type of card and don't publish their prices, so your agreement and statements are what count.

Card fees come out of your margin, not your sales

A 1.75% fee sounds small because it's measured against the sale. But your shop runs on what's left after the cost of the goods, and that's where the fee comes from.

Take an item you sell for £20 that costs you £12. Your gross profit is £8, a 40% margin:

The last row comes from one formula: fee as a share of gross profit = fee rate ÷ gross margin. Here that's 1.75% ÷ 40% = 4.4%. The thinner your margin, the bigger the bite:

A convenience store working on a 20% margin gives up almost 9% of its gross profit to a 1.75% fee. A gift shop or clothes shop on 50% to 60% feels less than half of that.

If you're VAT-registered, the fee is charged on the VAT too

A card fee is a percentage of the whole payment, and the whole payment includes VAT. Square spells it out: its fee comes out of the total of each transaction, including any VAT on the sale. You pay that VAT over to HMRC, but the fee on it is yours to pay.

If you're VAT-registered and the £20 item is standard-rated, it rings up at £24. A 1.75% fee on £24 is 42p, which is 2.1% of the £20 you keep and 5.3% of your £8 margin rather than 4.4%. To get the real cost, multiply your rate by 1.2: 1.75% becomes 2.1%, and SumUp's 0.99% becomes about 1.19%. Zero-rated goods, such as most food, books and children's clothes, carry no VAT, so their fee stays as quoted. If you're not VAT-registered, there's no VAT in your prices and nothing to adjust.

What a month of fees looks like

A month of fees isn't one rate times your takings. Each payment method has its own rate, cash costs nothing, and on some plans the type of card matters too. Here's a shop on SumUp that takes £15,000 in a month, priced on both of SumUp's plans:

On pay-as-you-go this shop pays about 1.5% of its takings in fees; on Payments Plus, about 1.1%. That's £67.10 a month saved, or about £805 a year. The plan pays for itself once your UK personal card takings pass about £2,700 a month (£19 ÷ the 0.7-point saving). If you're not VAT-registered, the plan costs you £22.80 a month, the saving drops to £63.30, and the break-even rises to about £3,300. SumUp suggests the plan from £3,000. Put in your own takings and rates to get your number.

Why your payouts are smaller than your takings

Your till records what the customer paid. Most providers pay out what's left after their fee, so the two never match, and the gap is your card fees.

• Record sales at the full amount the customer paid, and record card fees as a separate expense. Your sales figures then stay right when customers switch between cash and card, and you can see what the fees cost you.
• Square takes its fee out of each payment before it pays you. Dojo bills its transaction charges and card machine fees monthly, so check the bill as well as the transfers.
• Payouts take time. SumUp pays into its free business account by 7am the next day, weekends and bank holidays included. Square's standard transfers take one to two working days for free, or about 20 minutes for 1.95%. PayPal POS puts takings in your PayPal Business account within minutes, and automatic transfers to your bank cost nothing extra. Dojo transfers the next business day by default, or early the next morning, weekends included, for an extra charge.
• A refund doesn't always give the fee back. Square keeps the processing fee when you refund a payment. PayPal POS gives the card fee back when you refund a card payment. Dojo charges a 50p refund fee, and its card rate applies to refunds too.
• Disputes: Square doesn't charge a chargeback fee. Dojo adds a chargeback management fee to your bill, along with the disputed amount.

Can you add a surcharge for card payments?

Not on personal cards. Since 13 January 2018 it has been illegal in the UK to charge customers extra for paying with a personal debit or credit card, or with other payment methods such as PayPal. A phone or watch payment with a personal card counts as a card payment.

Business (commercial) cards are the exception. You may add a fee when a customer pays with one, but it can't be more than what that card costs you to accept.

That leaves your prices as the place to recover card costs. In the monthly example, cards are 90% of takings at 1.69%, so fees cost about 1.5% of sales, and prices about 1.5% higher cover them.

Is a payment method worth accepting? Work out the break-even

A payment method costs you its fee and earns you the sales you'd lose without it. The break-even uses the same formula: the share of that method's sales that must be extra business = fee rate ÷ gross margin.

Cards are an easy call. At 1.75% on a 40% margin, 4.4% of card sales, about one in 23, need to depend on you taking cards. If you're VAT-registered and selling standard-rated goods, it's 5.3%, about one in 19. With cards at 64% of all UK payments and cash at 8%, that's a low bar.

Clearpay is a closer call. Through Square at 6% + 30p, the fee on a £100 sale is £6.30, or 6.3%, and 6.3% ÷ 40% is about 16%: roughly one Clearpay sale in six has to be one you wouldn't otherwise have made, from a bigger basket or a customer who'd have walked out. If you're VAT-registered, the bar is higher still.

How do you find the rate you're really paying?

Your monthly statement or bill has the real number: divide the month's total fees by your card takings. Count everything, not just the transaction rate: terminal rental, any minimum monthly charge, extra charges for keyed-in or other non-qualifying payments, and the PCI non-compliance fee some providers add if you haven't completed your card-security check. £25 a month of terminal rental on £5,000 of card takings adds 0.5% on its own. If your statement splits fees by card type, do the sum for each one and you'll see which cards cost you most.

Then compare it with the published rates in the first table. Pay-as-you-go readers charge 1.69% to 1.75% with no monthly cost, and SumUp's plan brings UK personal debit and credit cards down to 0.99% for £19 a month plus VAT. If a contract works out above those once everything is counted, get quotes. SumUp offers custom pricing from £10,000 a month, and Dojo from £100,000 a year in card takings.

Let your POS do the sums

The UK doesn't require a certified till: in its summer 2026 consultation, HMRC says there are currently no mandatory standards for EPOS systems, so the POS you use is your choice. That may change. HMRC consulted from June to August 2026 on standards such as an unalterable record of every sale, possibly with certification or registration of till systems, and hasn't published an outcome yet. If rules come in, check whether your till meets them. What already applies: keep records of your sales (as a sole trader, for at least five years after the 31 January filing deadline), and since 2022 HMRC can fine anyone who makes, supplies, promotes or holds software that hides sales. Since April 2026, sole traders with qualifying income over £50,000 have also had to keep their tax records in Making Tax Digital software. DingPOS isn't Making Tax Digital software and doesn't send anything to HMRC.

If you run your counter on an iPad, DingPOS can estimate the fees for you. In Settings → Payment Methods, give each payment method its processing fee: a percentage, a fixed amount per transaction, or both (for Clearpay through Square, 6% and £0.30). DingPOS works out the fee on what the customer pays, VAT included, just as your provider does, so enter the rate your provider quotes. Square and Dojo don't give their fee back on refunds, so if you use either, turn off “Percentage fee returned on refunds”. The Payment Methods card on Stats then shows the estimated fee and net received for each method. DingPOS doesn't process payments or read your provider's statements, so these figures are estimates from the rates you enter, and your statement shows the actual amount.

Setup is covered in Can DingPOS track card and mobile payment fees?. Fee tracking is on the Standard plan and up (compare them on Pricing), and you can try everything free for 30 days.