Duty and Tax Calculator

Both charges, and how they compound.

Calculate duty and import tax together, showing the compounding effect and the effective combined rate.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Destination country

Goods value on the invoice

International freight

Insurance

Duty rate for your commodity code

Duty rates and thresholds change with trade policy. These are planning estimates, the entry filed with customs decides the actual charge.

Effective combined rate

24.8%

on the CIF value of £5,860

Duty£234.40

Import VAT£1,218.88

Total charges£1,453.28

Headline rates added together24.0%

Adding the headline rates gives 24.0%, but Import VAT is charged on the duty-inclusive value, so the two compound. Budget on the effective figure, not the sum.

How the Duty and Tax Calculator works

Duty and import tax are usually quoted separately and do not simply add. Because VAT is charged on the duty-inclusive value, 6% duty and 20% VAT produce an effective rate above 27%, not 26%, and on CIF valuation the freight is inside both.

Also known as: duty and VAT calculator · customs duty plus tax · total border charges calculator

What the formula says

The combined charge at the border is duty + import tax, calculated in sequence because the second depends on the first. Duty = customs value × duty rate. Import tax = (customs value + duty + any additional base items) × tax rate.

The sequence is what produces the compounding, and it is the single most common thing calculators get wrong by adding the two rates together instead.

The numbers, worked through

CIF value $20,495, duty 6.5%, VAT 20%. Duty is $1,332. VAT is 20% of $21,827, $4,365. Total $5,697.

Adding the rates instead gives 26.5% of $20,495 = $5,431, $266 low. The error is the VAT on the duty, and it grows with both rates.

At India's structure the compounding is heavier still: a 1% landing charge on CIF, then basic customs duty, then a 10% social welfare surcharge on the duty, then 18% IGST on everything. A 10% headline duty produces an effective border charge above 30%.

What the number leaves out

Presenting the combined figure as a single cost hides that one part is usually recoverable and the other never is. For a registered business the $5,697 above is really $1,332 of cost and $4,365 of temporarily committed cash.

For a consumer or an unregistered seller, both are cost, which is why the same shipment has a completely different economics depending on the importer's VAT status, and why marketplace sellers and direct importers reach different conclusions about the same product.

Turning it into a decision

Always calculate duty first and tax second, on the duty-inclusive base. Getting the sequence right matters more than getting the rates precisely right, because the sequence error is systematic and the rate error is not.

Then split the output into cost and cash. Two numbers rather than one is what makes the figure usable for pricing and for cash planning at the same time.

Who pays, and what the incoterm decides

Under DDP the seller is the importer of record and pays duty and tax. Under DAP or DDU the buyer pays at the door, usually to the carrier, with a disbursement fee on top. Under FOB or CIF for a commercial shipment, the buyer clears and pays.

For consumer sales this decision determines whether the customer receives a demand for money before their parcel is released, which is the single largest cause of international refusals and negative reviews in cross-border ecommerce.

For commercial imports, being the importer of record matters for a different reason: only the importer can reclaim the import VAT. A business that lets a supplier import DDP in the supplier's name may find the VAT is unrecoverable by anyone, which converts a cash flow item into a real cost of 20% of the shipment value. That is worth checking before agreeing DDP terms, because it is not obvious and it is expensive.

Whether the destination charges any levy beyond duty and VAT. Excise on alcohol and tobacco, environmental or recycling levies on packaging and electronics, and merchandise processing or harbour fees all sit outside the duty-and-tax pair and are easy to omit from a landed cost.

None of them is large individually and together they can add a percentage point or two, which on a thin margin is enough to matter.

Where to go next

The Duty and Tax question rarely arrives on its own. These are the ones that usually come with it:

Import Duty Calculator — Duty and import tax on the correct valuation basis.
Import Tax Calculator — VAT or GST due on an import.
Landed Cost Calculator — True cost per unit once everything is counted.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Sources

Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.

Frequently asked questions

Why is the combined rate higher than the two added together?

Because import tax is applied to the duty-inclusive value. 6% duty then 20% VAT on the result gives 1.06 × 1.20 = 27.2%, not 26%. The gap widens as either rate rises.

Which is usually larger?

Import tax, in most VAT and GST countries, a 20% VAT rate exceeds nearly any general duty rate. But VAT is often reclaimable while duty never is, so the smaller number is frequently the more painful one.

Does freight get taxed too?

Under CIF valuation, yes; it is inside the duty base and therefore inside the tax base as well. Under FOB the goods alone are dutiable, though tax may still apply to a wider value depending on the country.

How do I budget for this?

Model the effective combined rate rather than the headline rates, and add clearance and handling on top. For planning, importers commonly assume 25-35% above FOB cost for a CIF-valued destination with standard VAT.