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How to calculate landed cost

Landed cost is what an imported product really costs you once it is in your warehouse: the price you paid the supplier plus every charge to get it there and through customs. Quoting or pricing from the supplier's invoice alone is the most common way importers lose margin.

What goes into landed cost

  • The goods price on the supplier's invoice.
  • International freight and insurance, if the delivery term does not already include them.
  • Customs duty, excise, levies and surcharges assessed at the border.
  • Import VAT, which some businesses can recover and others cannot.
  • Port, terminal and handling charges, and any inspection or scanning fees.
  • Clearing agent or customs broker fees.
  • Inland transport from the port to your warehouse.
  • Storage, demurrage and detention if the goods sit longer than the free period.
  • The cost of currency conversion and payment fees.

Steps to calculate it

  1. Start from the goods price and the delivery term. Note the Incoterm on the quote, such as FOB or CIF. It tells you which of freight and insurance are already inside the price.
  2. Add freight and insurance to reach the CIF value. Use the actual freight and insurance quotes, converted to one currency. This is the customs value on a CIF basis.
  3. Add duty, excise, levies and VAT. Find the HS code and the destination's rates, then calculate them in the order the destination uses. The duty and VAT guide shows the standard layering.
  4. Decide whether import VAT is a cost. A VAT-registered business can often claim import VAT back as input tax. If you cannot, it stays in your landed cost. Check the rule for your destination and your registration.
  5. Add port, agent and inland costs. Get written quotes from your forwarder or broker for terminal handling, documentation, the clearing fee and delivery to your site. These vary by port and by shipment.
  6. Add a buffer for delay and exchange rate. Allow for storage or demurrage if clearance runs late, and for currency movement between the quote date and the payment date.
  7. Divide by the number of units. Landed cost per unit is the total landed cost divided by the quantity you can sell. Use it, not the supplier's unit price, as the base for your selling price.

Worked example (illustrative numbers)

A buyer imports 1,000 units invoiced at 10,000 USD FOB. Freight is 800 USD, insurance 100 USD, duty rate 10%, VAT rate 15%. The port, clearing and inland charges below are placeholders; use your own quotes.

  • CIF value: 10,000 + 800 + 100 = 10,900 USD.
  • Duty: 10,900 x 10% = 1,090 USD.
  • VAT: (10,900 + 1,090) x 15% = 1,798.50 USD.
  • Port and terminal charges: 450 USD. Clearing agent fee: 300 USD. Inland transport: 600 USD.
  • Landed cost with VAT included: 10,900 + 1,090 + 1,798.50 + 450 + 300 + 600 = 15,138.50 USD, or 15.14 USD per unit.
  • If the buyer recovers the 1,798.50 USD of VAT as input tax, the landed cost is 13,340 USD, or 13.34 USD per unit.

What Customs Declare covers

Customs Declare calculates the border taxes: duty, excise where a rate is on file, levies, trade-remedy duties and VAT, each with the source and date of its rate. Port charges, agent fees and inland transport are not tariff data. You add those from your own quotes.

Frequently asked questions

Is landed cost the same as CIF value?

No. CIF value is only the goods price plus freight and insurance. Landed cost adds duty, taxes and every local charge until the goods reach your warehouse.

Should I include import VAT in landed cost?

It depends on whether you can recover it. If you are VAT-registered and the destination lets you claim import VAT as input tax, you can leave it out of cost. If not, include it.

Why does landed cost matter for pricing?

Pricing from the supplier's invoice ignores duty, taxes and local charges. Pricing from landed cost per unit protects your margin and lets you quote a delivered price with confidence.

Sources

Last verified: 2026-09-29

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Get the border-tax part of your landed cost

Enter the HS code, destination and CIF value to see duty, excise, levies and VAT.

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