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 Customs 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.

Informal MPF Rates

Rate: $2.53 USD

Formal MPF Rates

Minimum: $32.71 USD
Maximum: $634.62 USD

NOTE: The above rates reflect a regulatory change that is either coming into or went into effect on October 1st, 2024. If you are reading this prior to that date, these numbers may be slightly less than what is posted. Additionally, several minor changes and fees are being added on October 1st, 2024, as detailed in CBP’s release. 

How Do I Calculate MPF?

Calculating the Merchandise Processing Fee is pretty straightforward. 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 $200,000.00, the MPF fee of 0.3464% calculates out to be $692.80. In this case, you need to take into consideration that the maximum amount of MPF charged will be what is collected by CBP.

MPF Exemptions

If your goods qualify for any Free Trade Agreements, the MPF may 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.

For help with this or any other fee or process you may encounter when working with US Customs, get in touch with our team at PCB. We have decades of experience and would be happy to help.