TikTok shop ads break-even.

TikTok's referral fee formula

TikTok Shop's US Seller University states that the referral fee equals the referral fee rate multiplied by (customer payment + platform discount - tax). The rate is 5% to 6% depending on the category, and since April 1, 2024 most categories pay 6%. A companion page adds that the calculation base includes shipping the customer pays. TikTok's own example: a $102 payment with a $5 platform discount and $2 tax at 6% is a $6.30 fee.

When an order is refunded or returned, TikTok refunds the referral fee minus a Refund Administration Fee of 20% of the referral fee, capped at $5 per SKU from May 15, 2025. The calculator uses both rules: it shows profit per delivered order, the administration fee you lose on a returned order, and the expected profit after your return rate (assuming returned goods can be resold and the outbound shipping is lost).

From profit to ad limits

Expected profit per order before ads gives the break-even ROAS (order value divided by that profit), the break-even ACOS and the maximum CPC (conversion rate times profit). Enter your real CPC and conversion rate to see the ad cost per order and the profit after ads.

Worked example

Customer payment $35, platform discount $5, tax $2, rate 6%: referral fee $2.28 on a $38.00 base. With a 10% creator commission ($3.30), item cost $10 and fulfilment $4, profit before ads is $18.42. At a $0.40 CPC and 2% conversion each order costs $20.00 in clicks, so the ad loses $1.58 per order.

• The rate is editable because TikTok may change it. Industry reports of a later increase were not confirmed on TikTok's own pages when this tool was checked.
• New-seller promotional rates and category exceptions (for example some jewelry at 5%) are not applied automatically.
• Flat-fee affiliate deals and Smart Promotion fees are not modelled.

Last checked against the sources 2026-10-19. Sources: TikTok Shop US Seller University: Referral Fee Updates - 2024 (formula, 5% to 6% rate, refund administration fee 20% capped at $5 per SKU); TikTok Shop US Seller University: Referral Fees in 2024 by Category (base includes customer-paid shipping).

FAQ

How is the TikTok Shop referral fee calculated?

Referral fee rate multiplied by (customer payment + platform discount - tax), according to TikTok Shop US Seller University. Customer-paid shipping is part of the base.

What is the TikTok Shop referral fee rate?

TikTok lists 5% to 6% by category, and 6% on most categories since April 1, 2024. Check your Seller Center, because TikTok can change it.

What is the refund administration fee?

On a refund TikTok returns the referral fee minus 20% of it, and since May 15, 2025 that fee is capped at $5 per SKU.

How do I work out break-even ROAS for TikTok Shop ads?

Divide the order value by your profit per order before ads. This calculator also adjusts that profit for creator commission and returns.

Does the calculator include creator commissions?

Yes, as a percentage you enter. Leave it at 0 if you run no affiliate program.

Are TikTok Shop ads billed per click?

Ad formats differ. This tool lets you enter a CPC and conversion rate, or you can ignore them and use the break-even ROAS directly against your ad dashboard.