How are stock transaction fees calculated? Whether you are a beginner in stock investment or an experienced investor, understanding what stock transaction fees are is essential to maximize your profits!

Today, Caven Growth Team will help you understand the different types of stock transaction fees, how to calculate stock trading costs, how to estimate stock transaction fees, and common questions about stock transaction fees.

Additionally, we will provide information on systematic investment plans to help you quickly find the investment tools that suit you best!

 

What are the stock transaction fees?

Whether you want to earn dividends steadily or profit from buying and selling stocks, you need to pay transaction fees to brokerage firms and transaction taxes to the government when you trade stocks! Here is an introduction to the transaction fees and securities transaction taxes.

Further Reading: How to Make Money from Stocks? 3 Essential Tips for Stock Trading!

Transaction Fees

Transaction fees are charged when you buy and sell stocks, amounting to 0.1425% of the purchase or sale amount. If the calculated fee is less than NT$20, some brokers will charge a minimum fee of NT$20.

Additionally, some brokers offer discounts on transaction fees to attract investors, ranging from 60% to 28% of the original fee.

More essential introductory information on stock investment can be found in the articles below.

Further Reading: Stock Investment Basics│How Beginners Can Start Trading Stocks from Scratch│Self-Study Basic Concepts of Stock Trading

Securities Transaction Tax

Securities transaction tax is only charged when you sell stocks, with a general tax rate of 0.3%. However, to stimulate the stock market, the Legislative Yuan reduced the "day trading" tax rate from 0.3% to 0.15% in 2017, and this rate will be in effect until December 31, 2024.

How to calculate stock trading costs?

From the above explanation, we can generally understand how to calculate the transaction fees when buying and selling a stock:

When buying stocks, the stock trading cost is: purchase amount * 0.1425%

When selling stocks, the stock trading cost is: (sale amount * 0.1425%) + (sale amount * 0.3%)

Stock transaction fee estimation

To help everyone quickly understand how to calculate stock transaction fees, below we provide estimations based on individual stock trading and odd-lot stock trading scenarios!

General Stock Trading

Assume today's goal is to buy one share at NT$33.7 and sell one share at NT$35. By applying the stock transaction fee formulas above, we can calculate the fees we need to pay for buying and selling:

Buying Stock Fee Estimation

Assume you buy stock A at NT$33.7 per share:

NT$33.7 * 1,000 * 0.1425% = NT$48.0225. After rounding down, the fee is NT$48.

If the broker offers a 40% discount for electronic orders, you only need to pay NT$48 * 0.6 = NT$28 as the transaction fee.

Selling Stock Fee Estimation

Assume you sell stock A at NT$35 per share:

NT$35 * 1,000 * 0.1425% = NT$49.875. After rounding down, the fee is NT$49.

Additionally, calculating the securities transaction tax: NT$35,000 * 0.3% = NT$105. Therefore, the total cost for selling one share at NT$35 is NT$49 + NT$105 = NT$154.

Finally, the total cost for buying one share at NT$33.7 and selling it at NT$35 is NT$48 + NT$154 = NT$202.

Table for Estimating Individual Stock Transaction Fees

 

Odd-Lot Trading

Buying and selling odd-lot shares requires paying "transaction fees" and "transaction taxes" just like trading whole shares. Similarly, the broker's transaction fee and the securities transaction tax for odd-lot trading are both 0.1425% and 0.3%, respectively.

Assume today's odd-lot transaction price is NT$301 for buying and NT$391 for selling. Below is an estimation of the fees for buying and selling odd-lot shares:

Buying Odd-Lot Fee Estimation

Assume you buy 1 share of stock B at NT$301 today:

Buying fee for 1 share: NT$ 301 * 0.1425% = NT$ 0.428925

Although the fee is NT$ 0.428925, since the fee is less than NT$ 20, it is charged as NT$ 20.

To avoid being overcharged, it is recommended to increase the buying amount to purchase odd-lot shares worth more than NT$14,035 (14,035 * 0.1425% = 19.99...).

Additionally, many brokers currently offer a minimum odd-lot fee of NT$1 to attract investors who frequently trade odd-lot shares. If you prefer investing through odd-lot trading, pay attention to whether your chosen broker offers such discounts.

Selling Odd-Lot Fee Estimation

Assume you sell 1 share of stock B at NT$391 today:

Selling fee for 1 share: NT$ 391 * 0.1425% = NT$ 0.557175

Similarly, since the fee is less than NT$20, the broker will charge NT$ 20. Therefore, it is recommended to sell odd-lot shares worth more than NT$ 14,035 to make it more cost-effective.

Additionally, calculate the securities transaction tax: NT$391 * 0.3% = NT$ 1.173, resulting in a total cost of NT$ 20 + NT$ 1 = NT$ 21 for selling 1 share at NT$391.

Finally, the total cost for buying one share at NT$301 and selling it at NT$ 391 is NT$ 20 + NT$ 1 = NT$ 21.

Odd-Lot Transaction Fee Estimation Table

Common questions about stock transaction fees

Q1. How are stock transaction fees calculated?

Stock transaction fees generally depend on the brokerage firm. Some brokers determine the fee based on the actual transaction amount, while others set a minimum fee of NT$20.

Therefore, before starting to invest, you can choose the broker that offers the most favorable terms based on your expected investment method.

Q2. What is the minimum stock transaction fee?

Currently, some brokers set the minimum stock transaction fee at NT$20, but others base it on the actual transaction amount. Therefore, NT$20 can be considered the minimum stock transaction fee.

Q3. Is the transaction fee for odd-lot trading cheaper?

Not necessarily. Although the transaction fee rate for odd-lot trading is the same as for regular stock trading, many brokers currently offer a minimum transaction fee of NT$1 for odd-lot trading.

If you plan to purchase odd-lot shares in multiple transactions, pay special attention to whether the transaction fees meet the minimum threshold!

Further Reading: What is Dollar-Cost Averaging? A Complete Guide to Fees, Advantages, and Disadvantages for New Investors

Q4. How much is the day trading fee for stocks?

The transaction fee for day trading stocks is the same rate as for regular stock and odd-lot trading, and it depends on the discounts offered by the broker.

However, the securities transaction tax for selling day-traded stocks is calculated at 0.15% (until the end of 2024).

If you are considering day trading as an investment strategy, make sure to take advantage of this reduced tax rate!

Q5. Do you need to pay transaction fees for buying and selling ETFs?

The transaction fee for buying and selling ETFs is the same as for regular stock and odd-lot trading, which is 0.1425% of the transaction amount.

However, the securities transaction tax for selling ETFs is only 0.1%. Although this percentage is lower than for stock trading, it is still advisable to pay close attention to the transaction costs when trading ETFs!

Further Reading: Recommended U.S. Stock ETFs for 2024! Key Points and Comprehensive Guide to Investing in U.S. Stock ETFs

Further Reading: [Stock Basics] What is the Weighted Index and Why Do Experts Pay So Much Attention to It?

Q6. How are the transaction fees for trading U.S. stocks calculated?

If you want to invest in the U.S. stock market, it is recommended to open an account with an overseas brokerage.

This way, the main transaction cost when buying and selling U.S. stocks will only be the wire transfer fee! (Each transfer is about NT$1,000, and most brokers offer fee-free transactions afterward.)

✅ Disadvantage of U.S. stock brokers: High wire transfer fees for single deposits

✅ Advantage of U.S. stock brokers: Low (or even no) transaction fees after the initial deposit

✅ Who should use U.S. stock brokers: Suitable for long-term investors and frequent traders

However, if you choose to use the domestic broker's sub-brokerage service, there will be a transaction fee of about 20-30 USD per trade.

If you use the domestic broker's sub-brokerage service for regular investments in U.S. stocks, the transaction fees will be more favorable.

Further Reading: How to Start with U.S. Stocks? Key Points for Investing in U.S. Stocks for Beginners

Caven's Conclusion

After reading the above information about stock transaction fees, it's important to note: Whether you are trading regular stocks, odd-lot stocks, or ETFs, you need to pay a transaction fee of 0.1425% of the transaction amount.

If the fee is less than NT$20, most brokers will charge NT$20. Therefore, when trading odd-lot stocks or ETFs, make sure the transaction fee meets the minimum threshold to avoid being overcharged!

If you want to learn more about investing in U.S. stocks, feel free to contact us to schedule a consultation and help you develop a clear strategy and direction in the stock market.

Further Reading: [Ex-Dividend Calculation Guide] How to Calculate Ex-Dividend and Experts’ View on Its Advantages and Disadvantages

Further Reading: How to Calculate Stock Dividends? What Are Cash Dividends? Essential Information for Beginners