Repricing after the surcharge ban: how much to adjust prices to cover card fees

If your business used to surcharge cards, the cost it recovered now comes out of your margin unless you lower the cost, adjust your prices, or both. The price rise needed to fully absorb card fees is card costs ÷ (total sales − card fee on the extra card sales), which is usually a little less than your effective card rate because only part of your sales are paid by card. In the illustrative example below, a business with $50,000 of monthly sales (ex GST), 80% by card, needs about 1.21% across all prices to absorb $600 of card fees, or about 0.81% if it first moves to a cheaper plan. Many businesses combine a smaller general rise with a lower-cost plan, rather than raising prices by the full old surcharge.

This guide is part of the best-fit selection guide. For the rule change itself, see surcharges removed from 1 October 2026. Figures are illustrative, not advice on your prices.

Step 1: Measure what you used to recover

From your POS or statements for a recent month before 1 October 2026:

Total sales (all payment methods), excluding GST
Card takings, excluding GST
Total card fees, including terminal rental and other fixed fees
Surcharges collected

If your surcharge was set at your average cost of acceptance, surcharges collected and card fees will be close. If you surcharged more than your cost, part of the old surcharge was margin, and you will not need to replace all of it to cover costs.

Step 2: Calculate the price rise needed

Illustrative business, all figures excluding GST:

Item	Figure
Total monthly sales	$50,000
Card share of sales	80%, so $40,000 by card
Plan	1.4% on all cards, $40 monthly rental
Monthly card costs	$40,000 × 1.4% + $40 = $600

If prices rise by r on all sales, extra revenue is $50,000 × r, but card fees rise too, by $40,000 × r × 1.4% = $560 × r. To fully absorb the $600:

$50,000 × r − $560 × r = $600
r = $600 ÷ $49,440 = 1.21%

A quick approximation is card costs ÷ total sales = $600 ÷ $50,000 = 1.20%, which is close enough for most decisions.

Step 3: Compare with lowering the cost first

Suppose a cost-plus quote averages 0.9% on the same card mix with the same $40 rental (illustrative):

New card costs: $40,000 × 0.9% + $40 = $400
Price rise needed: $400 ÷ ($50,000 − $40,000 × 0.9%) = $400 ÷ $49,640 = 0.81%
Monthly saving in card costs: $600 − $400 = $200, or $2,400 a year

Approach	Price rise needed	Card costs a month
Keep current plan, absorb fully through prices	1.21%	$600
Switch plan, absorb the rest through prices	0.81%	$400
Switch plan, no price change	0% (margin falls by $400 a month)	$400

Use the card fee calculator to work out costs on any quote, and the switching payback calculator if switching has an exit fee.

Step 4: Apply it to real prices

Percentages rarely land on tidy prices. Illustrative: a $4.50 coffee × 1.0121 = $4.55. Many cafés would either leave it, or move to $4.60 on some items and hold others. Practical approaches:

Raise a few high-volume items rather than everything.
Round at the next menu change instead of making small odd-cent increases.
Raise service or delivery pricing that already varies, as long as it is clearly displayed and not a disguised card surcharge.
Review at the same time as other costs, such as wages or ingredients, so customers see one change, not two.

If your sales are taxable, apply the rise to the GST-exclusive price; GST is then calculated on the new price.

Step 5: Display prices correctly

The Australian Consumer Law requires a business that shows a part of a price to also show the single total price prominently, where it can be calculated. Practical points:

Remove any "card surcharge" notices from counters, menus, websites and quotes.
You can offer a discount for a cheaper payment method, such as cash or bank transfer, as long as the display is clear and not misleading. The RBA's FAQs confirm that discounts remain available.
Weekend and public holiday surcharges are separate from the card change but must still be displayed clearly.

The ACCC publishes guidance on price displays and payment methods. Check it if you are changing how prices are shown.

Common mistakes

Raising prices by the full old surcharge rate. If only part of your sales are by card, or your surcharge was above your cost, this over-recovers and may cost you customers.
Leaving surcharging switched on in online checkouts, invoicing software or payment links.
Ignoring the interchange cut. Lower caps took effect on 1 October 2026; ask what your provider did with your rates before you set new prices.
Not checking the result. Compare margins for the three months after the change with the three months before.

Frequently asked questions

Can I charge card customers more and call it a service fee?

A fee charged only to customers who pay by card is, in substance, a card surcharge. Network rules prohibit surcharging eftpos, Mastercard and Visa cards from 1 October 2026, and disguising it may also be misleading. Get advice if unsure.

What if most of my customers pay cash?

Your card costs are a small share of total sales, so the price rise needed is small. Use the formula with your own card share.

Do I have to raise prices?

No. You can absorb the cost, lower it by changing plans, or adjust prices. It is a business decision.

Sources

Reserve Bank of Australia — FAQs on the removal of payment surcharges from 1 October 2026
Australian Competition and Consumer Commission — price displays, component pricing and payment methods
Australian Small Business and Family Enterprise Ombudsman — guidance for small businesses adjusting to the change
business.gov.au — pricing strategies for small businesses