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Free shipping threshold calculator
Find the order value where free shipping still leaves you the profit you want. Enter your costs for a parcel around the threshold size. Amounts are ex GST unless a box says otherwise.
Set free shipping over
$95.00 inc GST
| True shipping cost per order | $18.44 |
| Break-even threshold (ex GST, before rounding) | $85.42 |
| Profit on an order of exactly $95.00 | $20.42 |
Customers who add an item to qualify
An order nudged over the threshold only earns more than it would have if the customer adds at least $24.44 inc GST. Smaller add-ons cover less margin than the shipping charge you no longer collect.
Your most expensive zone
At $95.00 an order to that zone makes $9.50 after shipping. To keep your target profit there, its threshold would be $125.00 inc GST.
Uses the method in our guide to setting a free shipping threshold that pays. It's a planning estimate, not tax or financial advice. Postage for bigger parcels is often higher, so use the cost of a parcel at the threshold, not your average order.
How the threshold is worked out
True shipping cost is postage plus packaging and handling, plus a small allowance for parcels you have to resend. The threshold is that cost plus the profit you want, divided by your gross margin. If your prices include GST, it's multiplied by 1.1 and rounded up, because the margin you keep is on the ex-GST price.
Then check the edges
A single threshold can lose money on remote postcodes and on customers who add a cheap item to qualify. The optional boxes above show both. Many stores set a higher threshold for far-away zones, or keep free shipping to metro areas. More in our shipping guides.