DDP vs DAP Cost Calculator

Duty on the CIF value, tax on CIF plus duty, handling on both

The tool prices one international shipment two ways under Incoterms 2020: DAP (Delivered at Place), where the buyer pays import duty, tax, and clearance separately on arrival, and DDP (Delivered Duty Paid), where the seller prepays all of it plus a handling fee into one price. Enter goods value, freight, insurance, duty rate, tax rate, and fees once; the three stacks below then run in order — dutiable value, duty, tax on top of duty, handling fee on the sum of the two.

The $109.39 that turns a $14,596.40 shipment into a $14,705.79 one

A $10,000 shipment with $500 freight and $100 insurance, 12% duty on CIF value, 20% import VAT, a $150 clearance fee, $200 inland delivery, and a 3% DDP handling fee lands like this:

Duty & tax. CIF value = $10,000 + $500 + $100 = $10,600. Duty = $10,600 x 12% = $1,272. Tax = ($10,600 + $1,272) x 20% = $2,374.40.

DAP. Paid upfront (goods + freight + insurance + inland) = $10,800. Due at delivery (duty + tax + clearance) = $3,796.40. Total landed cost = $14,596.40.

DDP. Handling fee = ($1,272 + $2,374.40) x 3% = $109.39. Everything bundled upfront, nothing due at delivery. Total landed cost = $14,705.79 — exactly $109.39 more than DAP, which is the handling fee and nothing else.

That $109.39 is the whole of the difference. The underlying landed cost — goods, freight, insurance, duty, and tax — is the same either way, since Incoterms only decide who pays and when, not how much duty or tax is owed. DDP adds one extra cost on top: the handling or disbursement fee the seller charges for prepaying and administering customs on the buyer’s behalf. So DDP’s total is DAP’s total plus that fee — not more because of tariffs or shipping, only because of the service.

Both terms deliver to the buyer’s door with the seller arranging freight; the difference is only who handles import duty, tax, and customs clearance, and when. Under DAP the buyer pays at delivery and deals with customs and any surprise charges — here, $3,796.40 as a separate bill. Under DDP the seller pays upfront, usually via a local customs agent, and bundles it plus the handling fee into the invoice, so the buyer pays $14,705.79 once and nothing at the door.

The $72 the USA and Australia never charge on that same 12% duty

Where duty is assessed changes the duty amount, not just who pays it. Most countries — including India, the UK, the EU, and most of Asia, Africa, and South America — base import duty on the CIF value (goods + freight + insurance). The USA and Australia are the major exceptions, basing duty on the FOB (goods-only) value.

Run the shipment above on an FOB basis and duty = $10,000 x 12% = $1,200 — $72 less than the $1,272 CIF figure, and that $72 also drops out of the 20% tax charged on top of duty. Match the basis to the destination country before trusting either total.

The lighter the goods relative to the shipping, the wider the gap: on a $1,000 shipment with $200 freight at a 10% duty rate, duty is $120 on a CIF basis against $100 on FOB — 20% more, because freight is 20% of goods value there against 6% above.

Five terms, three questions: freight, customs, and where risk stops

These are Incoterms 2020 (and one retired term) rules that fix who pays for freight, who pays import duty and tax, and where risk transfers from seller to buyer. They don’t set the duty rate or tax amount itself — only who’s responsible for it.

DAP and DDP are the two rows this tool prices, and the two that work for any mode of transport. Between them they fix three things: who pays for carriage to the named destination (the seller, under both), where risk of loss or damage transfers (on arrival, under both), and who is responsible for import duty, tax, and customs clearance (the buyer under DAP, the seller under DDP). Incoterms govern cost and risk allocation only — they don’t cover payment terms, title transfer, or contract law, and this tool cannot price those.

CIF is a different category of term: it only covers sea or inland waterway transport, and risk transfers to the buyer once the goods are loaded on the vessel at the origin port — even though the seller pays freight and insurance onward to the destination port. The buyer still pays import duty, tax, and destination clearance under CIF, same as DAP. DAP and DDP work for any mode and carry risk all the way to the named destination; DDP is the only one of the three where the seller also pays duty and tax. And CIF the Incoterm is not the CIF valuation basis above — same three letters, different decision.

FCA transfers risk far earlier than DAP or DDP — as soon as the seller hands the goods to the buyer’s nominated carrier at origin. The buyer arranges and pays for main freight, insurance, and destination duty, tax, and clearance from that point on. DAP and DDP both have the seller arrange and pay freight all the way to destination; DDP additionally has the seller pay duty and tax, which FCA never does.

DDU is not a current Incoterm — it was formally replaced by DAP in the Incoterms 2010 revision and functions the same way: seller delivers to the named destination, buyer pays import duty, tax, and clearance. Some shippers, carriers, and marketplaces still use “DDU” out of habit or in older contracts; for any shipment governed by Incoterms 2010 or 2020, price it as DAP here.

When a $109.39 fee is cheaper than one refused parcel

Neither term is universally better; it depends who is better positioned to handle customs. DDP gives the buyer price certainty and a smoother delivery, which matters most for ecommerce and B2C shipments where an unexpected customs bill causes rejected parcels or chargebacks — but it costs the seller more upfront and requires the seller or its agent to be an importer in the destination country. DAP is simpler and cheaper for the seller and common in B2B trade, but shifts customs cost, delay, and paperwork risk onto the buyer.

The rule that falls out of the arithmetic: quote DDP when the handling fee is smaller than the cost of the buyer refusing the shipment — above, $109.39 against a $3,796.40 surprise at the door. Reverse it when the buyer clears customs routinely.

That is the recurring theme in seller and freight-forwarder communities: DAP shipments generate customer-service problems, because buyers get hit with an unexpected customs bill at the door, refuse the parcel, or leave a negative review, especially in ecommerce. It pushes many sellers toward DDP for consumer-facing shipments despite the higher upfront cost, while B2B shippers with sophisticated buyers more often stick with DAP or even FCA to keep their own quoted price lower and let the buyer manage customs.

Under DAP the buyer pays. The seller’s DAP price covers goods, freight, and insurance to the named destination; duty, import VAT/GST, and any customs clearance or brokerage fee are billed to the buyer separately, usually collected by the carrier or a customs broker before or at delivery. Under DDP the seller pays: directly or through a local customs agent or import-of-record service, it settles duty, import VAT/GST, and clearance fees in advance, then recovers that cost from the buyer inside one bundled invoice price — plus the handling fee.

Four figures this tool takes from you, not from a tariff schedule

The DDP handling or disbursement fee is what a seller, freight forwarder, or courier charges for prepaying import duty and tax on the buyer’s behalf and administering the paperwork, since they’re fronting money and taking on compliance risk. It’s commonly quoted as 2-5% of duty plus tax, though flat fees exist too — confirm the rate with your carrier rather than shipping on the 3% default. Three more inputs are equally yours:

• Duty rate, tax rate, and dutiable-value basis. The tool uses the rates and basis you enter — it does not look up actual HS-code tariff schedules, product classifications, or free-trade-agreement preferences for any country.
• De minimis thresholds. It does not model the shipment values below which duty or tax may not apply, which vary widely by country and change over time.
• One rate per shipment. It cannot split a mixed-product shipment across HS codes: it assumes one shipment at one duty and tax rate, where lines with different HS codes may each carry a different rate.
• Fee shape. The DDP handling fee is a single percentage you set; real disbursement fees can be tiered, have a minimum flat charge, or vary by carrier and shipment value.

Everything else is yours to move. This is a free, online calculator — no app, signup, or download required, working the same in any modern browser on desktop or mobile, with every figure (goods value, freight, duty and tax rates, fees) editable to match a real broker quote.

Sources and methodology

Incoterms 2020 definitions (DAP, DDP, DDU, FCA, CIF), the CIF-vs-FOB customs valuation split, and the typical DDP handling-fee range are cross-checked against multiple published freight-industry guides. The duty, tax, and cost formulas above are standard cost-accounting identities, verified against a hand-computed worked example in this site’s automated test suite.

• ICC (International Chamber of Commerce) — Incoterms® 2020: DAP or DDP, the official rules body
• BSI Freight — DDP vs DAP Cost Comparison
• FreightAmigo — DDP Shipping Incoterm: Complete Guide to Price Calculation
• Landmark Global — Difference Between DDP and DAP
• ImportCostIQ — DDP vs DDU/DAP

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