How to use this calculator
Enter the payment amount or drag the slider, then choose who receives the money and the type of business. The calculator shows the fee, what the merchant receives and the effective rate, then walks you through each step of how the result was worked out.
To estimate a full month, open the Monthly cost tab and add the payment sizes you usually receive. You’ll see your monthly and yearly fee, and which payment sizes make up most of it.
UPI MDR rates from 15 October 2026
NPCI announced these rates on 15 September 2026. They apply to UPI payments to businesses from 15 October 2026.
| Business type | ₹2,000 or less | Above ₹2,000 |
|---|---|---|
| Regular merchants (shops, restaurants, online stores) | Free | 0.4%, capped at ₹300 |
| Railways, telecom, insurance, fuel and utilities | Free | ₹5 flat |
| Mutual funds, stocks and brokers | Free | 0.02%, capped at ₹300 |
| Schools, colleges and exam fees | Free | Concessional rate, not yet published |
| Small vendors receiving up to ₹1 lakh a month | Free | Free |
How to calculate UPI MDR
For a regular merchant, the formula is:
MDR = payment amount × 0.4%, only if the payment is above ₹2,000, up to a maximum of ₹300.
| Payment | Working | Merchant pays | Merchant receives |
|---|---|---|---|
| ₹2,500 | ₹2,500 × 0.4% | ₹10 | ₹2,490 |
| ₹10,000 | ₹10,000 × 0.4% | ₹40 | ₹9,960 |
| ₹40,000 | ₹40,000 × 0.4% | ₹160 | ₹39,840 |
| ₹1,50,000 | ₹600, capped | ₹300 | ₹1,49,700 |
The fee is worked out on each payment separately, not on your daily or monthly total.
What UPI MDR costs a typical shop in a month
Here’s a mobile accessories shop’s UPI payments in an average month:
| Payment size | Payments a month | Fee each | Monthly fee |
|---|---|---|---|
| ₹1,500 | 300 | ₹0 | ₹0 |
| ₹4,500 | 60 | ₹18 | ₹1,080 |
| ₹18,000 | 15 | ₹72 | ₹1,080 |
| ₹90,000 | 2 | ₹300 | ₹600 |
| Total | 377 | ₹2,760 |
That’s ₹2,760 on ₹11.7 lakh of UPI sales, an effective rate of about 0.24%. Most payments are under ₹2,000, so they stay free. Taking the same sales by credit card would typically cost 1.5% to 2.5%.
UPI MDR for merchants: myths vs facts
| Myth | Fact |
|---|---|
| “I can add the 0.4% to my customer’s bill.” | Not allowed. NPCI’s rules say merchants can’t pass the fee on to customers. |
| “Most of my UPI payments will now be charged.” | NPCI says more than 95% of merchant payments are ₹2,000 or less, and those stay free. |
| “The fee is charged on my total daily sales.” | It’s worked out on each payment separately. |
| “I need a new UPI QR code.” | Existing QR codes keep working as they are. |
| “Small shops need GST registration to stay free.” | No. Eligibility depends only on how much they receive each month. |
| “MDR is a new government tax.” | It’s a fee shared between banks, payment apps and the UPI network. |
| “UPI is now more expensive than cards.” | UPI stays the cheapest option. Credit card MDR typically runs 1.5% to 2.5%, and debit card MDR goes up to 0.9%. |
Tips for merchants before 15 October
Confirm your category with your bank. Your bank or payment provider decides whether you’re a regular merchant, an essential service or a small vendor. The difference can be 0.4%, ₹5 or nothing at all.
Find out where your fees come from. For most shops, the fee comes from a few larger payments, not everyday sales. The Monthly cost tab shows this at a glance.
Keep one price for every payment method. Charging UPI customers more breaks NPCI’s rules and invites complaints.
Check your settlement statements. From 15 October, compare what you receive against the rates above, and raise any mismatch with your bank.
More questions about UPI MDR
What is UPI MDR?
MDR, or merchant discount rate, is a fee a business pays for accepting digital payments. From 15 October 2026, it applies to UPI payments to businesses above ₹2,000.
When does UPI MDR start?
On 15 October 2026. Payments made before that date carry no fee.
What is the UPI MDR on ₹5,000?
₹20 for a regular merchant, ₹5 for an essential service, and ₹1 for an investment platform.
Is there GST on UPI MDR?
NPCI’s FAQ doesn’t say. Card MDR attracts 18% GST, and some reports expect the same here. Tick the GST option in the calculator to see the higher figure, and confirm with your bank.
How do I find out which category my business is in?
Ask your acquiring bank or payment provider, meaning the company that set up your UPI QR or payment gateway. They apply the category to your account.
Where does the MDR money go?
It’s shared between banks, payment apps and the UPI network to fund infrastructure, fraud prevention and cybersecurity. NPCI has also proposed a fund to help small merchants in smaller towns adopt UPI.
Paying by UPI as a customer? Read UPI Charges From October 15: Will You Pay Extra?
Rates as announced by NPCI on 15 September 2026, effective 15 October 2026. Last updated: 1 October 2026. Confirm your category and charges with your bank.
