Two exchange rates apply to your import, and you only control one
An invoice in a foreign currency gets converted twice, by two different parties, at two different rates, for two different purposes. Most import budgets use one rate for both jobs and quietly absorb the difference.
Rate one: what you actually pay
On a 20,000 invoice at a mid-market rate of 0.79, with a 2.5% bank margin:
| At the mid-market rate | 15,800.00 |
| Effective rate after margin | 0.8098 |
| What it costs you | 16,195.00 |
| Cost of the margin | 395.00 |
395.00 is the price of the spread. It is a real cost, it is negotiable, and it never appears on any customs document.
Rate two: what duty is assessed on
Customs does not care what your bank charged you. Authorities publish a conversion rate — typically fixed for a period and set from an official source — and the dutiable value is your invoice converted at that rate, on the relevant date.
Say that published rate is 0.785. Your customs value is 15,700.00, and at 6.5% the duty is 1,020.50. Budget it instead at your own effective rate of 0.8098 and you would have expected 1,052.68 — 32.18 out, on the duty line alone, before VAT multiplies it.
Why the direction of the error is predictable
Your bank's margin always moves against you, so your effective rate is always worse than mid-market. The customs rate is not trying to sell you anything, so it sits near mid-market. That means budgeting duty at your own effective rate systematically over-estimates the duty — the error is in the comfortable direction, which is exactly why nobody notices it.
It becomes uncomfortable when the currency moves between the date you agreed the price and the date customs uses. The FX margin is a known cost you can shop for; the gap between the two dates is a risk, and the calculator will not price it for you.
Which of the two is worth your attention
They are not the same size, and they are not the same kind of problem.
| What it costs here | Can you do anything? | |
|---|---|---|
| Bank margin at 2.5% | 395.00 | Yes — a 0.4% margin on the same invoice costs 63.20, saving 331.80 |
| A 3% currency move before entry | 32.50 of duty | Not by shopping around — only by hedging or by pricing sooner |
The margin is the larger number and the easier fix. It is a price you are quoted, it varies enormously between providers, and switching is administrative rather than financial. Most importers spend their attention on the second row because currency movement feels like the serious risk, and leave 331.80 a shipment on the table in the first.
The practical habit
Keep the two rates in separate columns of whatever you plan in. One column is "what I pay" and takes your effective rate, margin included. The other is "what duty is worked on" and takes the published customs rate for the period. They will not match, they are not supposed to, and a model that forces them to match is wrong in a direction that flatters the budget.
Work it for your own shipment
The figures above come from the same code the calculators run, so typing these inputs in reproduces them exactly. Your own numbers are the point though — work your own invoice and margin through the currency converter, then take the customs-rate figure into the duty calculator.
These are estimates, not assessments. Duty rates, the taxable base, and the valuation rules that decide them are set by national law and by how your goods are classified. A customs broker or your national customs authority gives you the binding answer; this site gives you the arithmetic so you know roughly what is coming and which question to ask.