Etsy now holds sale fees in your pending balance and retires the reserve minimum

Every seller with an Etsy Payment account is affected; Etsy announced the updates on July 27, 2026, retired the reserve minimum by July 29, 2026, and gave no completion date for the fee change.

Alura News

Etsy has changed when sale fees leave your Payment account. Fees tied to a sale now stay in your pending balance alongside the earnings from that sale and come out when those earnings clear. Etsy has also retired the reserve minimum, and your current balance can now show as negative.

Etsy announced the Payment account updates on July 27, 2026 and said they would arrive "over the next few months". Its Seller Handbook article of July 29, 2026 listed the reserve change as live and the fee timing as coming soon. By September 22, 2026, Etsy's Newly Crafted roundup listed fee grouping among the things you "can now" do.

Who it affects

Every seller with an Etsy Payment account. The fees that now wait with the sale are transaction fees (including shipping and gift wrap), payment processing fees, regulatory operating fees, Offsite Ads fees, and VAT or other seller taxes.

Other charges still come out of your current balance when they're charged: Etsy Ads, shipping labels, listing and renewal fees, and subscriptions such as Etsy Plus.

If your shop has a reserve, reserve funds are now part of your pending balance, and the standalone reserve module is gone.

What it means for your balance

Your balance now has three parts: current, pending and total. Current plus pending equals total.

Say your current balance is $20 and you sell a $44 item with $6 shipping. The 6.5% transaction fee on $50 is $3.25. (This example leaves out the processing fee, which varies by country.) Under the old timing, Etsy says sale-based fees were "deducted from your balance as soon as a sale is made, even if that sale's earnings are still processing or in reserve." Under the new timing, your current balance stays at $20 while the sale is pending. When the earnings clear, the net $46.75 moves to current, which becomes $66.75.

Now say you buy a $30 shipping label before that sale clears. Labels are charged in real time, so your current balance shows minus $10. When the sale clears, it rises to $36.75. Etsy says a negative current balance reflects "your balance at that moment and will update as pending funds become current."

What to do

  • Check your balance before you buy labels or raise an ads budget. Those charges come out of your current balance when they're charged.
  • If your total balance is negative at the end of the month, Etsy says you'll have an amount due on the first of the next month.
  • If you're in a reserve, select "What this means" under your balance to see when reserved funds become available and when Etsy will re-evaluate the reserve.

What we don't know yet

Etsy gave no completion date and hasn't said whether every account has the new fee timing. Etsy's Fees & Payments Policy, last updated October 5, 2026, still says transaction fees "are deducted from your current balance as each sale occurs", which doesn't match the Help Center. The transaction tabs and the per-sale fee breakdown were still marked "coming soon" in Newly Crafted.

Sources

Related articles