Payment Processing Fees for Contractors, Explained 

Every time a customer pays you online, a small piece of that payment goes to someone else before it reaches your bank account. That’s a payment processing fee. It’s normal, so unavoidable if you want to accept cards, and it’s one of the least understood costs in a contracting business. 

This guide breaks down what payment processing fees actually are, what’s normal to pay, how Joist Payments compares to other options on the market, and how to build these costs into your pricing so they stop quietly eating your profit. 

What Are Payment Processing Fees, and Why Do You Pay Them? 

A payment processing fee is the cost of electronically transferring funds from your customer’s account to yours. It’s split between the card network, the customer’s bank, and your payment processor. You never see it as a separate charge. It’s simply deducted before the money lands in your account. 

When a customer taps their card or clicks “pay,” several things happen in a couple of seconds. The card network (Visa, Mastercard, and so on) checks the transaction. The customer’s bank approves it. Your payment processor, which may be Stripe or PayPal when you use Joist Payments, helps move the funds and charges the processing fee. 

That cut is made up of three parts: 

• Interchange is the biggest piece. It goes to the customer’s bank and typically incurs a 1% to 3% fee on the transaction. 

• Assessment fees go to the card network itself, usually 0.15% to 0.25%. 

• Processor markup is what your payment provider adds on top to run the service. This is the only part that varies greatly between providers. 

Most contractor-focused apps, including Joist, use a flat rate that bundles all three components into a simple number. That’s why you see a single percentage plus a small flat fee, instead of three separate line items. 

What’s a Normal Processing Fee for a Contractor to Pay? 

Small businesses typically pay 1.5% to 3.5% per card transaction, according to NerdWallet’s 2026 guide to processing fees. Where you land in that range depends on your processor’s pricing model and the mix of cards your customers use. ACH bank transfers often cost less than cards, commonly around 1%, and may be capped depending on the provider. 

If you’re paying more than 3.5% on standard card transactions, it’s worth asking your processor why. If you’re paying under 1.5%, double-check you’re not missing a monthly fee or minimum charge hiding somewhere else in the pricing. 

Rates also shift depending on how the card is used. In-person tap payments are usually cheaper than a customer entering their card number to an online invoice, because there’s less fraud risk for the processor to account for. 

How Joist’s Payment Processing Fees Compare 

Joist Payments charges 3.49% + $0.49 for cards, 2.79% + $0.49 for Tap to Pay, and 1% capped at $15 for ACH transfers. That puts Joist’s card rate near the upper end of the typical range, in line with entry-tier plans from other invoicing apps, while its ACH rate matches the industry standard for low-cost bank transfers. 

Here’s how that stacks up against the processing rates that other contractors and small-business apps publish for card payments. All figures below are the rates each provider has published on their own site or help center as of mid-2026. Always confirm current rates directly with a provider before switching, as pricing can change. 

A fair reading of this table: Joist is not trying to be the cheapest possible payment processor. Its card rate sits toward the higher end of the published range. The trade-off is that payments are built directly into the contractor workflow: you can send estimates, convert them into invoices, collect a deposit, accept payment, and track the job in the same place. For many small contractors, the decision is not just “Who has the lowest rate?” It’s “Which option helps me get paid faster with less admin?” 

See Your Actual Payment Costs Before You Switch Anything 

Log in to your Joist account and turn on Joist Payments to see exactly what a transaction would cost on your next invoice, before your customer ever sees a number. 

Markup vs. Margin: Why This Fee Comes Out of Your Profit 

Markup is the percentage you add on top of your cost. Margin is the percentage of the final price that’s actually profit. A processing fee reduces your margin even when your markup stays the same, because it’s taken from the total the customer pays, not from your cost. 

Say you quote a $2,500 bathroom job with a 20% markup over cost. If a customer pays by card and you eat the 3.49% + $0.49 fee yourself, that’s roughly $87 gone straight from your profit, not from your materials budget. Your markup on paper hasn’t changed, but your actual margin has. 

This is why processing fees belong in the same conversation as your overhead burden, the ongoing cost of running your business that isn’t tied to one specific job (insurance, software, a truck payment, and so on). A processing fee is a small, repeating overhead cost that scales with every dollar you invoice. Treat it the same way you’d treat fuel or insurance: build it into your pricing model, don’t just absorb it and hope it evens out. 

Should You Pass Processing Fees on to Your Customers? 

You can, but the rules vary by state and change often. A credit card surcharge is a percentage added specifically for paying by card. A convenience fee is a flat charge for using a non-standard payment method. Both must be clearly disclosed before the customer pays, and a few states restrict or ban them outright. 

This is genuinely one of the more complicated parts of running a contracting business, and it’s not something to guess at. Visa caps card surcharges at 3% and Mastercard at 4%, and both require the fee to be disclosed as a separate line at the point of sale and on the receipt, never folded into the price. Neither network allows a surcharge on a debit card. On top of those network rules, a handful of states, including Connecticut and Massachusetts, restrict or ban surcharging outright, and the list shifts as courts weigh in. 

Because this changes so often, we’ve covered the full legal breakdown separately. Read What Is a Convenience Fee? A Guide for Contractors for the state-by-state considerations, and check with a professional before you add any fee to an invoice. 

If you’d rather skip the legal homework, Joist Payments has a built-in Cover Payment Processing Fee toggle that adds the transaction cost directly to the invoice total, clearly itemized, so the customer sees exactly what they’re paying for before they approve it. 

A Real Example: What Fees Cost on an Actual Job 

On a $2,500 invoice paid by card at Joist’s standard rate, the processing fee is $87.74. The same invoice, paid by ACH, costs $15 because the 1% rate hits Joist’s $15 cap. That’s a real difference of roughly $73 on a single mid-size job, just from the payment method the customer picks. 

Here’s a worked example using a hypothetical contractor we’ll call Dave, a plumber who sends four invoices a month, averaging $2,000 each, for a total of $8,000 in monthly volume. 

If Dave moves just one of those four invoices a month from card to ACH, he keeps an extra $55.29 that would otherwise go to processing costs, based on the numbers above. Move all four, and the monthly savings grow to $221.16. That’s a modest amount on any single job.  

Multiplied across a year, it adds up to a real materials budget, a tool replacement, or several hours of admin time you no longer have to recover from your profit. Every dollar saved on fees is a dollar that doesn’t have to come from somewhere else in the job. 

Which Payment Method Should Contractors Use for Different Jobs? 

The best payment method depends on the invoice amount, how quickly you need the money, and how easy you want the payment to feel for the customer. 

For small service calls, card or Tap to Pay usually makes sense because speed matters more than saving a few dollars in fees. If you finish a $250 repair, collecting payment before you leave is often preferable to waiting for a bank transfer. 

For larger deposits, progress payments, and final balances, ACH is usually the best option to offer first. On a $5,000 invoice, a capped ACH fee can save you well over $100 compared with a standard card payment. 

For emergency jobs, after-hours work, and first-time customers, card payments can reduce collection risk because you can collect before or immediately after the work is complete. 

For repeat customers, ACH may be the better default because the customer already trusts you, and the lower fee protects your margin on every future invoice. 

How to Lower Your Processing Fees Without Losing Customers 

Offer ACH for larger invoices, use Tap to Pay for in-person collections instead of manual card entry, and set a minimum invoice size for card payments if fees are cutting too deeply into small jobs. None of these require you to stop accepting cards. They just give customers a cheaper option when the job size makes sense. 

A few practical moves that don’t require a difficult conversation with your customer: 

• Offer ACH as the default for deposits and final payments over a few thousand dollars. Many customers will choose the lower-cost option if you explain it clearly and make the payment process easy. 

• Use Tap to Pay when you’re standing in front of the customer. It’s cheaper than a manually entered card, and it gets the payment moving before you’ve even left the driveway. 

• Batch smaller add-on charges into one invoice instead of running several small card transactions, since the flat per-transaction fee hits harder on small amounts. 

Review your rate every year or two. Processing rates and card network rules shift, and a rate that was competitive two years ago might not be anymore. 

When Processing Fees Are Worth Paying 

The cheapest payment method is not always the best payment method. A 3% card fee can still be worth it if it helps you collect a deposit faster, avoid a late payment, or close out a job before you leave the property. 

For example, paying $70 in fees on a $2,000 invoice may feel expensive. But if accepting a card means you get paid today instead of chasing the customer for three weeks, the fee may be cheaper than the admin time, cash-flow stress, and risk of non-payment. 

The goal is not to avoid every processing fee. It’s to use the right payment method for the right situation: fast methods when the collection risk is high, lower-cost methods when the invoice is large, and the customer relationship is established. 

Article Sources 

• NerdWallet. Credit Card Processing Fees: A 2026 Guide for Businesses. March 6, 2026 

• Internal Revenue Service. About Publication 535, Business Expenses.June 27th, 2026 

• Visa. U.S. Merchant Surcharge Q&A. Accessed July 10th, 2026