Merchandise Processing Fee 2023

So you have just cleared your first shipment into the US, and the prospects for increasing exports are high; your business plan is coming together! However, upon receipt of your first invoice from your US customs broker, you notice an additional charge that does not equal the original expenses you had expected. When you inquire, the US custom broker explains that every shipment into the US is subject to a Merchandise Processing Fee (MPF). In this blog, we will explain what MPF is, when it is applicable, and how it is calculated. 

What is a Merchandise Processing Fee?

The Merchandise Processing Fee (MPF) is a user fee that the US Customs and Border Protection (CBP) charges. It is charged in addition to US Customs duty as an ad valorem tax at a rate of .03464%. It is calculated as a percentage of the value of the shipments shown on the invoice, also known as the Customs appraisement. This user fee carries a minimum and maximum amount depending on the entered value of the shipment. 

MPF is required on informal (goods valued $2,500.00 USD or less) and formal (goods valued over $2,500.00 USD) entries into the US.

At the time of this writing, the current minimums and maximum rates for formal and informal entries are:

Informal MPF Rates

Rate: $2.53 USD

Formal MPF Rates

Minimum: $31.67 USD
Maximum: $614.35 USD

How Do I Calculate MPF?

Calculating the Merchandise Processing Fee is pretty easy. You must consider the ad valorem fee, which is 0.3464%, as well as the minimum and maximum amounts. 

For a shipment valued at $7,200.00, the MPF fee of 0.3464% calculates out to be $24.98. In this case, you need to take into consideration that the minimum amount of MPF charged will be what is collected by CBP.

For a shipment valued at $180,000.00, the MPF fee of 0.3464% calculates out to be $623.52. In this case, you need to take into consideration that the maximum amount of MPF charged will be what is collected by CBP.

Formal MPF Calculation

Minimum: $31.67 USD
Maximum: $614.35 USD

MPF Exemptions

If your goods qualify for any Free Trade Agreements, the MPF may very well be exempt.

CBP offers this preference program table as a reference guide to exemptions. As there are many trade agreements with the US, all of which evolve, it's best to speak to a trade advisor about which are applicable.

Looking for a customs broker to help import your next shipment to the US? We can help.