How we calculate landed cost
What this calculator actually computes
Landed cost is the all-in figure you pay to get goods onto your dock — not just the supplier's invoice. It bundles the product price, freight, insurance, customs duty, import tax (GST/VAT), and the government processing fees that kick in on commercial-scale shipments. Get any one input wrong and the total drifts by hundreds of dollars. So the engine is built to mirror exactly how a customs authority assembles the bill, line by line, in the order they do it.
Why the duty base matters: CIF vs FOB
The single biggest source of wrong answers is using the wrong base value for duty. Countries don't agree on this. Many value duty on CIF (cost + insurance + freight to the border), so international shipping inflates the duty figure. Australia is FOB-style: duty is charged on the customs value, which approximates the goods loaded at the port of export. International freight and insurance to Australia are stripped out before duty is calculated — though foreign inland freight and packing before export stay in.
The engine never assumes. Each country's data file declares its dutyBasis, and the calculation reads from there. We don't hardcode "freight is always dutiable", because for Australia it isn't.
Why GST/VAT compounds on duty
Import tax is not simply a percentage of your goods. For Australia, GST (10%) is charged on the Value of the Taxable Importation (VoTI) = customs value + duty + international transport and insurance. Two consequences fall out of this that trip people up:
- Tax is levied on the duty. You pay GST on top of the duty already added — the taxes stack, they don't run in parallel.
- GST adds the freight back. Even though duty excluded international freight and insurance, the VoTI puts them back on. So the same shipping cost is out of the duty base but inside the tax base. The engine models this as two separate bases per country rather than one shared "dutiable value", which is why it stays correct where a single-base shortcut would not.
GST also isn't universal: basic food, certain medical aids, and precious metals are GST-free. The calculator treats the tax rate as an input per category, not a fixed 10% on everything.
How Incoterms feed the customs value
Your supplier quotes a price under an Incoterm, and that term silently decides what's already inside the number. EXW is goods only; FOB/FCA includes loading at origin; CFR adds freight; CIF adds freight and insurance; DDP means the seller has already paid the duty and tax. The tool asks for the Incoterm so it knows what to add versus what's bundled — and, critically for Australia, what to strip back out of the customs value while keeping it in the VoTI.
De minimis and the two GST mechanisms
Below a country's de minimis threshold, low-value parcels clear without duty or tax. Australia's is AUD 1,000 customs value — at or under that, goods clear free of duty and GST at the border (alcohol and tobacco excepted). Separately, since 1 July 2018, GST on consignments of AUD 1,000 or less sold to consumers is collected by the overseas seller or marketplace at checkout. These are two different mechanisms, and the calculator surfaces both rather than conflating them. Above the threshold, the fixed charges appear: Import Processing Charge and the biosecurity charge.
Correctness by construction
Every rate, threshold, and fee lives in a country data file with source links and a lastVerified date — nothing is buried in code. The engine is pure and unit-tested against worked examples drawn straight from the official authorities (ABF, Home Affairs, the ATO). It's an estimate, not a customs ruling: your tariff classification and origin paperwork ultimately set the duty rate. But the structure of the calculation matches how the border actually works, so the only thing you need to verify is the inputs.