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Merchant Discount Rate (MDR) refers to the fee charged to merchants for using ShopeePay’s payment processing services. The MDR will be charged on every ShopeePay transaction amount and is inclusive of GST.

Goods and Services Tax (GST) is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. 

Since Shopee is a GST-registered company, we are obligated to pay GST on fee we receive for ShopeePay services.

⚠️Note

If your business is GST-registered, you will be able to claim the GST from IRAS by using the monthly tax invoices sent by ShopeePay.

How is Merchant Discount Rate (MDR) Calculated? 

Let’s assume your customer transaction amount is $10, MDR charged at 5% and GST charged 9%

MDR: $10 x 5% = $0.5

GST: $0.5 x 9% = $0.045

Nett amount you will receive: $20 - $0.5 - $0.045 = $19.45

The example above is a hypothetical MDR calculation for demonstration purposes,