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Delivery charge calculator

From what the carrier charges you to the delivery charge your customer pays, with VAT and what each parcel earns or costs you.

Delivery charge calculator

What the carrier charges you for this parcel, excluding any VAT you reclaim. Royal Mail postage is often exempt: enter it as you pay it.

£

As a % of the carrier rate, if your carrier adds a fuel or peak-season surcharge. Optional.

%

Box, padding and label, per parcel. Optional.

£

The time spent packing the order, or what your fulfilment partner charges. Optional.

£
What your customer pays

Pass the cost on, add a markup, pay part of it yourself, offer free delivery or set a flat charge.

VAT rate of the goods you ship

A delivery charge the sale requires follows the rate of the goods. A delivery service sold as an optional extra is standard-rated. "No VAT" if you are not VAT-registered.

Price ending

Always rounded up, on the charge your customer pays.

Delivery charge to your customer

—

Enter the carrier rate to see the delivery charge.

Cost of one parcel
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Delivery charge excl. VAT
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VAT
—
Delivery charge incl. VAT
—
Profit or loss per parcel
—

Recent calculations

Nothing yet: copy, export or save a calculation to find it here.

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How it works

Enter what one parcel costs you (the carrier rate, any surcharge, packaging, picking and packing), then choose what your customer pays: the cost, the cost plus a markup, part of it, nothing at all, or a flat charge. You get the delivery charge excluding and including VAT at the rate of the goods you ship, what each parcel earns or costs you, and every step of the working.

Add up the cost of one parcel

Start from what the carrier charges you for this parcel, excluding any VAT you reclaim. Royal Mail postage is often exempt from VAT, so enter it as you pay it. Add any fuel or peak-season surcharge your carrier adds as a percentage of its rate, then packaging (box, padding, label) and the time spent packing, or what your fulfilment partner charges.

Choose what your customer pays

You can pass on the exact cost, add a markup, charge only part of it, offer free delivery or show a flat charge. The first three start from the cost; with free delivery, all of it stays with you. With a flat charge, enter the price your customer will see, including VAT: the calculator works out the amount excluding VAT and shows whether the charge covers your costs.

Use the VAT rate of the goods

When the terms of the sale require you to deliver, HMRC treats the goods and their delivery as a single supply: the delivery charge follows the VAT liability of the goods, even if you show it separately. Delivering standard-rated goods means 20% VAT on the charge; delivering zero-rated goods, such as most food or children’s clothes, means a zero-rated charge. If you are not VAT-registered, choose "No VAT" and enter your costs including VAT.

Optional delivery and separate packing are standard-rated

If delivery is not part of the sale, because the customer could collect and asks you to deliver for an extra charge, the delivery is a separate supply, standard-rated whatever the goods. The same goes for a separate charge for packing. Choose 20% in those cases. The calculator covers deliveries within the UK: sending goods abroad or bringing them in follows other VAT rules (VAT Notice 700/24, section 4).

Round up and check

A .90, .99 or whole-pound ending always rounds up, on the charge including VAT; the VAT is then taken back out of that price with HMRC’s VAT fraction. The profit or loss per parcel shows what delivery earns you, or what you pay towards it yourself. Copy the workings, export them as a CSV file or save them to Priostack.

Cost of one parcel = carrier rate + surcharge + packaging + picking and packing, the surcharge being a percentage of the carrier rate.

Charge excl. VAT = the cost, or cost × (1 + markup), or cost × the share your customer pays, or 0 for free delivery.

VAT = charge excl. VAT × rate of the goods; charge incl. VAT = charge + VAT.

For a flat charge or a rounded price, start from the charge incl. VAT: VAT = charge × rate ÷ (100 + rate), which is 1/6 at 20%, then net = charge − VAT.

Profit or loss per parcel = charge excl. VAT − cost of one parcel.

Every amount is rounded to the nearest penny, halves rounded up.

Example: a £6.50 parcel with a 12% surcharge, charged on with a 20% markup

The carrier charges £6.50 plus a 12% fuel surcharge of £0.78. With £0.60 of packaging and £1.20 of packing time, the parcel costs £9.08. With a 20% markup the delivery charge is £9.08 + £1.82 = £10.90 excluding VAT, or £13.08 including 20% VAT. Rounded up to £13.90, it holds £13.90 × 1/6 = £2.32 of VAT, leaving £11.58: each parcel earns you £11.58 − £9.08 = £2.50.

Frequently asked questions

Do I charge VAT on delivery?

If you are VAT-registered and the sale requires you to deliver, yes, at the rate of the goods: the delivery charge is part of a single supply of delivered goods, even when it appears as a separate line (VAT Notice 700, paragraph 8.3). That covers most online sales. If you are not VAT-registered, you charge no VAT at all.

Royal Mail charges me no VAT on postage. Can I pass it on without VAT?

No. The postage Royal Mail charges you may be exempt, but your charge to your customer is taxable, even if it is exactly the same amount (VAT Notice 700, paragraph 8.3). It takes the rate of the goods when the sale requires delivery, or the standard rate for an optional delivery service. Passing on £3.20 of postage for standard-rated goods means charging £3.84 including 20% VAT.

What rate applies when a parcel holds standard-rated and zero-rated goods?

The delivery charge then relates to goods at two rates. HMRC asks for a single price covering supplies at different rates to be apportioned fairly, and section 31 of VAT Notice 700 shows methods based on selling prices or on costs. The calculator uses one rate at a time: split the charge first, then work out each part.

Must I show the delivery charge before the customer orders?

Yes. Before a consumer is bound by an online or other distance contract, you must give all additional delivery charges or, where they cannot reasonably be worked out in advance, the fact that they may be payable (Consumer Contracts Regulations 2013, Schedule 2).

Do I refund delivery when an online customer cancels?

Yes. When a consumer cancels within the cancellation period, you refund what they paid for delivery, up to the cost of the least expensive common and generally acceptable delivery you offered. If they chose a dearer option, such as next-day delivery, you refund only what that cheapest option would have cost (regulation 34).

Why does my rounded charge not give a round figure excluding VAT?

Because VAT is taken back out of the price your customer pays. A £4.95 charge including 20% VAT holds £4.95 × 1/6 = £0.825 of VAT, £0.83 to the nearest penny, so the charge excluding VAT is £4.12. That is HMRC’s VAT fraction, the way to work VAT out of a VAT-inclusive price.

Sources

  1. HMRC: The VAT guide (VAT Notice 700), paragraphs 7.3.1 (VAT fraction), 8.3 (delivery charges) and 31 (apportionment) (25 June 2026)
  2. HMRC: Postage, delivery and direct marketing (VAT Notice 700/24), section 2.2 (30 September 2022)
  3. GOV.UK: VAT rates (12 December 2014)
  4. legislation.gov.uk: Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, regulation 34 (consulted on 11 November 2026) (11 November 2026)
  5. legislation.gov.uk: Consumer Contracts Regulations 2013, Schedule 2, paragraph (g): additional delivery charges (consulted on 11 November 2026) (11 November 2026)

This calculator gives general information and is not legal, tax, financial or accounting advice. The VAT rate and rules that apply depend on your goods and your terms of sale: check them with HMRC or a professional adviser.

Last reviewed: