How Transaction Charges Are Calculated When Donors Choose to Cover Them?

When a donor opts to cover the payment gateway fee, the checkout total updates to include the charge. Most donors expect this to be simple arithmetic — multiply the donation by the percentage, add the fixed fee, and done. In most cases, that's close, but you may occasionally notice the total is a few cents higher than that simple calculation suggests.

This article explains why that happens and why it is the correct, expected result.

Suppose a donor intends to give $100, and your gateway charges $0.30 + 3%.

A natural first instinct is:

This feels right, but there's a subtlety: the gateway applies its percentage to the total amount charged to the donor's card — not just the original donation. So if the card is charged $103.30, the gateway takes 3% of $103.30, not 3% of $100.

Here's what actually happens with $103.30:

The institution ends up $0.10 short. The cover charge needs to be slightly higher to fully compensate.

To find the exact amount that ensures your institution receives the full intended donation after all fees, we use:

With the same example ($100 intended, $0.30 fixed, 3%):

Let's verify this works:

The $0.10 difference from the naive calculation goes to the payment gateway as part of its percentage fee on the grossed-up total. It does not go to Almabase.

Here's how this plays out across a few donation amounts (gateway: $0.30 + 3%):

No. This is the mathematically correct approach. The formula ensures that after the gateway takes its percentage cut of the entire transaction, your institution receives exactly what the donor intended to give. The simpler calculation would leave your institution a few cents short on every covered donation.

This behaviour is consistent with how other fundraising platforms handle this calculation.