When a tenant pays rent or fees using a credit card, a convenience fee is added on top of the payment amount — it's not deducted from your payout. This ensures that you receive the full amount the tenant intends to pay (e.g., rent, late fees, etc.).
🔢 How Is the Fee Calculated?
To calculate the total amount a tenant is charged, we use the following formula:
Convenience Fee = (Amount × Card Percentage Fee + Card Flat Fee) ÷ (1 - Card Percentage Fee)
📘 Formula Variables Explained:
Amount: The net amount you receive (e.g., rent is $1,285).
Card Percentage Fee: The credit card fee percentage, expressed as a decimal = 3.1% becomes 0.031.
Card Flat Fee: Fixed amount per card transaction = $0.30.
This formula "grosses up" the payment, adjusting the total charge so that after processing fees are deducted, you still receive the full net amount.
💡 Example Calculation:
Let’s say a tenant's rent is $1,285, and the card fees are 3.1% + $0.30.
Given:
Amount= $1,285Card Percentage Fee= 0.031Card Flat Fee= $0.30
Step-by-step:
= (1285 × 0.031 + 0.30) ÷ (1 - 0.031)
= (39.835 + 0.30) ÷ 0.969
= 40.135 ÷ 0.969
Convenience Fee ≈ 41.42
✅ Result:
The convenience fee charged to the tenant is $41.42. So the total amount the tenant pays is $1,326.42 ($1,285 + $41.42), ensuring you receive the full $1,285.