How to Calculate Your Etsy Net Income, With a Worked Example

Etsy shows you sales. It does not show you what each sale leaves in your account after fees, labels, ads, and refunds. This is the formula, applied to one order.

The formula

Start with everything the buyer paid you for the item and shipping. Subtract what Etsy and its tools take. The result is your Etsy-side net. Then subtract your own costs to see what is left for you.

1. Order total: item price plus shipping you charged.
2. Minus refunds and cancellations.
3. Minus Etsy fees: listing, transaction, and payment processing.
4. Minus advertising: Etsy Ads and Offsite Ads.
5. Minus shipping labels bought on Etsy, including tax on the label.
6. That is your Etsy-side net. Then subtract your materials and packaging.

A worked example

A $40.00 item with $5.00 shipping charged to the buyer, so the order total is $45.00. The shipping label costs you $5.50 and your materials cost $12.00. Fees use the US rates described in our fees guide: 6.5% transaction, 3% plus $0.25 processing, and a $0.20 listing fee.

If the same order came through an Offsite Ad at 15%, subtract about $6.75 more. The Etsy-side net drops to about $28.02 and what is left for you to about $16.02. One ad-attributed sale can take a third of what you would otherwise keep.

What a single order does not show

• Listing fees on items that have not sold yet.
• Etsy Ads spend that did not produce a sale.
• Monthly subscriptions such as Etsy Plus.
• Refunds issued in a later month than the sale.
• Your own time, packaging, and tax.

These are shop-level costs. They belong in the monthly total, not in any one order, which is why a spreadsheet built order by order tends to overstate what you keep.

Common mistakes

• Applying the 6.5% transaction fee to the item price only, when it also covers shipping and gift wrap you charge.
• Treating the shipping you charge as pure income and forgetting the label cost.
• Leaving ad spend out because it is billed separately from the order.
• Counting a refund in the month of the original sale instead of the month it happened.

This is a reconciliation method, not tax advice. Ask your accountant how to report Etsy income and expenses.