Here we give you all the information you need about what a brokerage fee (courtage) is and how to record it in your accounts.
Courtage is a fee you pay to the broker when you buy or sell securities, such as shares. This transaction cost covers the broker's costs and provides a profit margin for supplying the trading platform and other services. Funds usually charge no brokerage fee on purchases and sales, but may have a separate management fee.
What types of brokerage fee are there?
There are fixed brokerage fees, percentage-based brokerage fees and a combination of the two.
Fixed brokerage fee
A fixed brokerage fee is a flat fee you pay to carry out a securities transaction. The fee is therefore the same regardless of the size of the amount.
Variable brokerage fee
A variable brokerage fee means you pay a percentage of the full transaction amount. If the variable brokerage fee is 0.2% and you buy shares for 10,000 SEK, the brokerage fee will be 20 SEK.
A variable brokerage fee sometimes also has a minimum fee that must be reached. If the minimum brokerage fee is 39 SEK and the variable brokerage fee comes to 18 SEK, you then pay the minimum fee of 39 SEK.
Fixed and percentage-based brokerage fee
With a fixed and percentage-based brokerage fee, both a fixed and a variable fee are charged for your transaction.
An example of such a brokerage fee is a fixed fee of 30 SEK plus a variable fee of 0.4% of the purchase amount. For a share purchase of 10,000 SEK the variable fee is 40 SEK, giving a total brokerage fee of 70 SEK.
These types of brokerage fee can also have minimum fees you must reach, but minimum fees are more common with purely variable brokerage fees.
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How do brokers price their brokerage fees?
The larger Swedish brokers for securities transactions have different packages in which the brokerage fee you pay varies. There are normally three different price packages.
- Mini or micro package: This package suits people who make many transactions for smaller amounts, usually under 50,000 SEK. The brokerage fee is low for small transactions, and the package is often offered to attract new customers to the broker's platform. The brokerage fee in this package is usually a low percentage and can sometimes include a minimum fee.
- Mid-range package: This package suits people who make medium-sized investments, typically between 50,000 and 150,000 SEK per transaction. The brokerage fee is often a combination of a variable percentage and a fixed fee, giving a flexible cost structure for customers with medium transaction volumes.
- Fixed-price package: This package is mainly intended for larger investors making transactions for larger amounts, often over 150,000 SEK. The brokerage fee consists of a fixed fee regardless of the size of the transaction. For a fixed-price package to pay off, the average transaction usually needs to be substantial, since fixed fees become more favourable at high volumes.
Brokerage fees when trading unlisted shares
Brokers that trade unlisted shares usually charge a higher brokerage fee than for listed shares. The brokerage fee for trading unlisted shares is often between 3% and 5% of the transaction volume per deal, since these shares are less liquid and require more administrative handling.
How do you record brokerage fees in your accounts?
Brokerage fees are not normally recorded as a separate item but are included in the acquisition cost on a purchase and in the sale proceeds on a sale. If you buy shares for 10,000 SEK with a brokerage fee of 30 SEK, the acquisition cost used for the tax calculation is 10,030 SEK. On a sale, the brokerage fee is deducted from the sale proceeds to calculate the capital gain or capital loss.
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Frequently asked questions
How is the brokerage fee charged?
The brokerage fee is charged when the transaction is carried out. When you buy shares, the brokerage fee is almost always added to the total purchase amount, and when the transaction goes through, the broker deducts both the brokerage fee and the payment for the shares from your account.
When you sell your shares, the brokerage fee is deducted from your sale amount as part of the transaction. Once the transaction has been completed, the proceeds of the sale minus the brokerage fee are transferred to your account.
What is a minimum brokerage fee?
A minimum brokerage fee is the lowest amount the brokerage fee always costs. If the minimum brokerage fee is 49 SEK and the transaction has a variable cost of 29 SEK, the fee you pay is still the same as the minimum brokerage fee, that is, 49 SEK.
Who decides how high the brokerage fee is?
The level of the brokerage fee is set by the online platform, such as Nordnet or Avanza. The brokerage fee charged must always be shown clearly, and if the online platforms change their brokerage terms, they must inform their customers.
Do you pay a brokerage fee when trading unlisted shares?
Yes, you usually have to pay a brokerage fee when you buy unlisted shares, in the same way as a brokerage fee is charged when you buy shares in listed companies.
