Calculation methodology and editorial policy

Maintained by James F. Kollie, Jr. · Last reviewed 2026-09-09

One calculation engine

The free calculator, TrueCost Pro, the Pro demo and the sample report all call the same calculation code. There is no separate "lite" arithmetic: Pro adds scope — multiple products, allocation, saved projects, reconciliation, reports — never different formulas. A figure you check in the free calculator will be the same figure Pro produces from the same inputs.

Money is handled with decimal arithmetic rather than binary floating point, and shared costs are split using a largest-remainder method so every allocation sums exactly to the amount entered, to the cent.

Calculation sequence

1. Goods value, in the currency you actually pay, at the rate you actually get.
2. Plus international freight and insurance, giving CIF.
3. Customs value, derived from CIF according to the destination rule you select — CIF, goods only, or CIF with an uplift.
4. Customs duty: customs value × the duty rate you have verified for your tariff line.
5. Excise and levies, each evaluated as its own rule: percentage of a chosen base, amount per unit, per kilogram, per ton, per litre or per gallon, or a fixed amount, clamped to any stated minimum and maximum.
6. The tax base, assembled from the components you switch into it — customs value, duty and each individual levy or excise line.
7. Import VAT or GST: tax base × the tax rate.
8. Clearing, handling and delivery costs, entered individually so nothing is hidden in a single lump.
9. Total landed cost, then landed cost per sellable unit — you set sellable units, so wastage and damage are yours to declare.
10. Profit, margin, markup, break-even price and target selling price, all derived from unrounded totals so the reconciliation holds.

The step-by-step reasoning behind this order is set out in our guide to calculating landed cost.

What TrueCost determines — and what it does not

It does determine the arithmetic: given your values, rates, bases, rules, quantities and prices, it computes CIF, customs value, duty, excise, levies, tax, total landed cost, per-unit cost, allocation shares, profit, margin, markup, break-even and target price, and shows every intermediate figure so you can audit it.

It does not determine your tariff classification; the duty, excise, levy or tax rate that applies to you; whether a preference, rebate, exemption or deferment is available; whether your goods are dangerous goods; the customs value a customs officer will assess; or whether your declaration is correct. Those are decisions for you, your licensed clearing agent and the destination authority.

The hazardous-goods flag shown against an HS code is advisory. It tells you that goods of that classification commonly involve dangerous-goods handling, so that you check further. A code alone cannot establish dangerous-goods status: that requires the safety data sheet, UN number, class, packing group, concentration, flash point, quantity and packaging, assessed against the applicable transport and import regulations.

Tariff and HS verification standards

• HS code descriptions are looked up from the UN Statistics Division Harmonized System 2022 reference. The source and revision are displayed with the result.
• We treat the first six digits as internationally authoritative for classification, and national 8–10 digit extensions as destination-specific and unverifiable by us.
• Every costing carries editable fields for the destination tariff description, its source and the date you checked it, so a saved estimate records its own provenance.
• We publish no duty, excise, levy or VAT/GST rate database, and we present no rate as authoritative. Where a lookup fails or a code is invalid, the tool says so rather than guessing.

Country presets: sourcing and review

A small number of destination presets exist to save typing and to demonstrate how a real tax base is assembled. They are explanatory starting points, not a tariff service. Our rules for them:

• A preset is only published where we can describe the structure — customs value basis, duty treatment, named levies with their own bases and clamps, and what enters the tax base — from the destination authority's own published material.
• Every preset value remains fully editable. Nothing is locked, because your product, origin and status can change any of it.
• Country pages carry a review date, and are re-checked when we become aware of a change, at minimum on an annual cycle.
• We do not mass-generate country pages. A destination gets a page when we have something genuinely specific and sourced to say about it — currently Liberia and South Africa. Everywhere else is handled by the global settings, which let you enter any structure yourself.

Editorial policy

• Guides and notes are written and reviewed by James F. Kollie, Jr. and carry a visible published date and review date.
• We do not publish testimonials, customer results, ratings, certifications or case studies we do not have. Where a page shows figures, they are either your inputs or clearly labelled illustrative examples.
• Where an external authority matters, we link to a primary source — the World Customs Organization or the destination customs or revenue authority — rather than paraphrasing a secondary summary.
• Content explains stable, general principles. Anything rate-specific is framed as something you must verify, with the verification steps written out.
• We correct errors rather than quietly editing them away: substantive corrections update the review date.

Corrections

If a formula, a described rule or a preset looks wrong to you, we want to know. Send us the detail — the page, the figure and the source you are working from. We check it against the primary source, correct the tool or the page, and update the review date. If the error affected the arithmetic, we say so on the page.

Disclaimer

Every result TrueCost produces is an estimate based on the information you enter. Nothing on this site is customs, tax, legal or financial advice, and nothing here creates a professional relationship. TrueCost is not customs software: it does not file declarations and it does not communicate with any customs authority. Confirm your classification, rates, tax base and exemptions with the destination customs authority or a licensed clearing agent before you commit to a purchase, a price or a shipment.