Incoterms Cost Split Calculator
Select an Incoterm (EXW, FCA, FOB, CFR, CIF, DAP, or DDP) and enter estimated costs to see how total shipment costs split between buyer and seller. Simplified planning guide only — not a legal Incoterms interpretation.
Select an Incoterm and enter estimated costs to see how total shipment costs split between buyer and seller. Planning guide only — not a substitute for legal Incoterms interpretation or contract advice.
Free on Board — seller covers origin costs and loads goods on the vessel. Buyer covers freight, insurance, destination.
Formula
Seller Cost = Goods + all costs up to agreed delivery point | Buyer Cost = all costs from agreed point onwards
Incoterms define the point at which cost and risk pass from seller to buyer. EXW represents minimum seller obligation (goods only). DDP represents maximum seller obligation (everything including duty and delivery). Terms in between split costs at specific points in the transport chain — origin, vessel loading, destination port, or final delivery location.
Worked Example — FOB vs CIF Comparison
Same shipment, two Incoterms — USD 10,000 goods · USD 1,200 freight · USD 80 insurance:
FOB: Seller pays goods + origin + export = ~USD 10,450 · Buyer pays freight + insurance + destination + duty
CIF: Seller pays goods + origin + export + freight + insurance = ~USD 11,730 · Buyer pays destination + duty
Under FOB, the seller quotes USD 10,000 and the buyer arranges freight. Under CIF, the seller quotes USD 11,730 (including freight and insurance) and controls those costs — but the risk transfers to the buyer at the loading port regardless. Many buyers prefer FOB to control freight costs and carrier selection.
Frequently Asked Questions
What this calculator does
The Incoterms Cost Split Calculator shows how total shipment costs divide between buyer and seller under common Incoterms 2020 rules. Select an Incoterm (EXW, FCA, FOB, CFR, CIF, DAP, or DDP) and enter estimated cost components — the calculator shows which party bears each cost and the total buyer vs seller obligation.
This is a planning tool for cost comparison and supplier negotiation. It is not a legal interpretation of Incoterms contractual obligations.
Why Incoterms affect who pays freight, duty, VAT and delivery
Incoterms define the point at which cost responsibility (and risk) transfers from seller to buyer. Under FOB, the buyer arranges and pays international freight, insurance, import clearance, duty, VAT and delivery. Under DDP, the seller bears all these costs. The same shipment can have very different buyer-side costs depending on the agreed Incoterm.
This matters for landed cost planning: if you buy FOB, you must add freight, insurance, duty, VAT and handling to the supplier price to get your true unit cost. If you buy DDP, the supplier price already includes everything — but it will be higher. Comparing supplier quotes on different Incoterms without normalising the cost is a common procurement error.
FOB vs CIF vs DAP vs DDP in practice
| Cost element | FOB | CIF | DAP | DDP |
|---|---|---|---|---|
| International freight | Buyer | Seller | Seller | Seller |
| Cargo insurance | Buyer | Seller | Seller | Seller |
| Import clearance | Buyer | Buyer | Buyer | Seller |
| Import duty | Buyer | Buyer | Buyer | Seller |
| Import VAT/GST | Buyer | Buyer | Buyer | Seller |
| Destination delivery | Buyer | Buyer | Seller | Seller |
Worked example — same order under FOB vs DDP
Shipment: 2 pallets of packaged food products, China to Netherlands
| Cost | FOB (buyer pays) | DDP (seller price) |
|---|---|---|
| Product | €4,000 | included |
| Ocean freight | €620 | included |
| Insurance | €30 | included |
| Duty (8.5%) | €395 | included |
| VAT (21%) | €1,059 | included |
| Broker + handling | €180 | included |
| Total buyer outlay | €6,284 | €6,400 |
Under FOB, the buyer has more control and visibility over each cost component. Under DDP, the single price is simpler but slightly higher because the seller adds margin on services. VAT is reclaimable in both scenarios for VAT-registered businesses.
Common mistakes to avoid
- ×Comparing a €4,000 FOB quote directly with a €6,400 DDP quote — they include different cost elements and are not like-for-like.
- ×Assuming CIF means “delivered” — under CIF, the buyer still pays import duty, VAT, customs clearance and domestic delivery.
- ×Not confirming insurance scope under CIF — the seller is only required to provide minimum coverage (Institute Cargo Clause C).
- ×Forgetting that customs value depends on the Incoterm — CIF-basis countries use CIF value for duty; the US uses FOB value.
- ×Assuming DDP means zero compliance risk — if the seller under-declares or misclassifies, the importer of record may still be liable.
Use this in your workflow
Use the buyer cost total to feed into the Landed Cost per Unit Calculator. Calculate freight cost with the Freight Cost per KG Calculator and duty with the Import Duty Calculator. Browse all Online Business Calculators.
When to use this calculator
- →Comparing buyer total cost under FOB vs CIF vs DDP for the same shipment
- →Briefing a new supplier on how Incoterms affect the quoted price responsibility
- →Understanding total seller cost under DDP to ensure the quoted price is profitable
- →Training procurement or finance teams on Incoterms cost allocation
Related calculators
Related guides
Practical explanation of all 11 Incoterms 2020 rules — who pays what, with worked examples and common mistakes.
The complete landed cost formula — how Incoterms determine which costs appear in your landed cost calculation.
Understanding the duty component that buyers pay under FOB, CIF and DAP terms.
Important note
Incoterms define cost and risk allocation — they do not constitute a complete sales contract. This calculator shows typical cost splits but does not account for every contractual variation. Always confirm responsibilities in writing with your trading partner and consult a trade adviser for complex arrangements.
Last updated: July 2026