Charges that a factor places on a factoring transaction against a set of services/ facilities provided to the seller, including collection and receivables management, and credit protection. Factoring fee (also known liberally as factoring commission or factoring service charges) is typically calculated as a percentage of turnover/ invoice value. For instance, if the factoring fee is fixed at 1.5% and the invoice value is $10,000, the factoring fee will be $15,00. The percentage of factoring fee is determined at the initiation of the factoring arrangement, in consideration of multiple factors, such as annual sales volume, number of customers, number of invoices and credit notes, average invoice value, and customer risk. With all other factors held constant, factoring fee is commonly higher for non-recourse factoring and export factoring than other types.

Factoring fees are a key component of factoring charges (in addition to discount charge and handling fee).