How Stripe Connect Fees Actually Work for Contractors

If you're running invoices through a contractor app and taking credit cards, you're probably paying Stripe Connect fees under the hood. The base rate is 2.9% + 30 cents per card transaction. But most software companies add another 1 to 2 percentage points on top of that, bringing your real cost to 4.0% or even 4.9% total. On a $20K progress invoice, that platform markup alone costs you $200 to $400. Here's how the math works, where to find the fee disclosure in your software contract, and what you can do about it.

What Stripe Connect Actually Charges (Before Platform Markup)

Stripe Connect is the payment infrastructure most contractor apps use to let you take credit cards. Stripe's base fee is 2.9% + 30 cents per successful card charge. That rate applies to Visa, Mastercard, Discover, and most US debit cards.

If your customer pays a $10,000 invoice by card, Stripe takes $290 + $0.30 = $290.30. You get $9,709.70 deposited to your bank account two business days later. That's the pure cost of card processing, no software company involved yet.

American Express runs slightly higher at around 3.5%, but most apps lump that into the same 2.9% advertised rate and eat the difference or pass it through as a separate line item. Stripe also charges 0.8% for manually keyed transactions (higher fraud risk), but invoice payments are almost always customer-initiated online, so you stay at 2.9%.

Where the Platform Markup Comes From (and How Much It Really Costs)

Your contractor software company connects to Stripe using something called a platform account. They can set the processing rate you see to anything above Stripe's 2.9% floor. The difference between what you pay and what Stripe charges goes straight to the software company as revenue.

Most apps in the construction space charge 4.0% to 4.9% total for contractor payment processing. That means they're adding 1.1 to 2.0 percentage points of pure margin on top of Stripe's cut. Here's what that looks like on a typical progress invoice:

• $5,000 invoice at 4.5% total = $225 in fees. Stripe gets $145, platform keeps $80.
• $10,000 invoice at 4.5% total = $450 in fees. Stripe gets $290, platform keeps $160.
• $20,000 invoice at 4.5% total = $900 in fees. Stripe gets $580, platform keeps $320.

That platform markup adds up fast when you're running five or six invoices a month. On $100K in annual card volume at 4.5%, you're paying $4,500 total. Strip out Stripe's $2,900 and the software company is pocketing $1,600 a year just for routing the payment.

How to Find the Real Fee in Your Software Contract

Most apps bury the processing rate in the terms of service or the payments section of their help docs. Look for phrases like "service fee," "transaction fee," "payment processing fee," or "convenience fee." If the number isn't on the pricing page, it's probably not 2.9%.

The sneakiest contracts say "Stripe fees apply" without listing a percentage. That wording technically means you're paying Stripe's rate plus whatever the platform tacks on, but you won't know the real number until you process your first invoice and check the deposit.

Some apps let you connect your own Stripe account (called "bring your own processor"). That gets you back to the true 2.9% + 30¢ rate, but you lose the integrated reporting and sometimes the automatic payout timing. Worth it if you're doing volume. When I was running pool jobs, I would've switched in a heartbeat to save 1.5 points on a $15K liner replacement invoice.

Passing Credit Card Fees to the Customer (If Your State Allows It)

A bunch of states let you pass Stripe fees construction jobs generate straight to the customer as a surcharge or service fee. Florida, Texas, and most of the Southeast allow it. New York, California, Connecticut, and Massachusetts either ban it outright or regulate the disclosure language heavily.

If your state allows surcharging, you can add a line item to the invoice that says "Credit card processing fee: 3.0%" or whatever your real cost is. Stripe's rules say the surcharge can't exceed your actual cost, so if you're paying 4.5%, you can pass up to 4.5% to the customer. You can also offer a discount for ACH or check to avoid the fee conversation entirely.

Most customers don't blink at a 3% card fee if you tell them up front. They're used to it from other vendors. The ones who complain usually just pay by check. I always put the fee language in the estimate so there's no surprise when the invoice hits.

Why Workhand Doesn't Mark Up Stripe Fees

When I built Workhand, I wanted invoicing and credit card payments baked in, but I didn't want to turn payment processing into a profit center. Contractor credit card fees are already high enough without another two points going to software margin.

Workhand uses Stripe Connect at the standard 2.9% + 30 cents with zero markup. You pay exactly what Stripe charges, and we don't take a cut of the transaction. The entire processing fee goes to Stripe for handling the card networks, fraud protection, and depositing your money.

We make money on the monthly subscription, not on your invoice volume. That way your processing cost stays flat whether you're billing $10K a month or $100K a month. If you want to see the full fee breakdown, the invoice feature page walks through how payments and read receipts work: workhand.app/features/invoices.

Other Payment Processing Options (and Why Most Contractors Stick with Stripe)

You can always use a standalone Square or PayPal terminal and manually reconcile payments back to your job costing sheet. Square's rate is 2.6% + 10¢ for keyed transactions, 2.9% + 30¢ for online invoices. PayPal runs 3.49% + 49¢ for invoices, which is higher than Stripe once you're above a $500 ticket.

The problem with standalone processors is you lose the automatic connection between the invoice, the payment, and the job record. You end up typing everything twice, once in the payment app and once in your job tracker. That's fine when you're doing two jobs a month. It's a nightmare at ten.

Stripe Connect inside your contractor app gives you one-tap invoice delivery, automatic payment matching, and a deposit record that ties back to the job for profit tracking. That's worth staying at 2.9% instead of hunting for a 2.5% processor that doesn't talk to the rest of your workflow.

Frequently asked questions

What is the standard Stripe Connect fee for contractors?

Stripe charges 2.9% + 30 cents per card transaction. Most contractor apps add 1 to 2 percentage points of platform markup on top, bringing the total to 4.0% to 4.9%.

Can I connect my own Stripe account to avoid platform markup?

Some apps allow you to bring your own Stripe account, which gets you back to the true 2.9% rate. You may lose integrated reporting or automatic reconciliation, but it's worth it if you process high volume.

How do I find out what my contractor app is actually charging for credit card fees?

Check the terms of service, pricing page, or help docs for "transaction fee" or "payment processing fee." If the rate isn't listed, process a test invoice and compare the deposit to the invoice total to reverse-engineer the percentage.

Can I pass Stripe fees to my customers in Florida?

Yes. Florida allows surcharging as long as you disclose it and don't exceed your actual processing cost. Add a line item to the invoice or offer a discount for check or ACH payment.

Does Workhand charge a platform fee on top of Stripe's 2.9%?

No. Workhand passes through Stripe's 2.9% + 30 cents with zero markup. The full processing fee goes to Stripe, and we make money on the monthly subscription instead.

What's the difference between 2.9% and 4.5% on a $20,000 invoice?

At 2.9%, you pay $580 in fees. At 4.5%, you pay $900. The extra 1.6 percentage points costs you $320 per invoice, which goes to the software platform as markup.

Are American Express fees higher than Visa and Mastercard?

Yes, Amex typically runs around 3.5%. Some apps absorb the difference and keep your rate at 2.9%, while others pass through the higher Amex rate as a separate line item.

Is it better to use Square or Stripe for contractor invoices?

Square and Stripe charge similar rates for online invoices (both around 2.9% + 30¢). Stripe Connect integrates better with contractor software for automatic payment matching and job costing, which saves manual reconciliation time.