Cashback Calculator
Calculate cash back rewards on a single purchase, estimate your annual reward from monthly card spending, or compare two offers head-to-head. Three modes in one tool — every result explained in plain English so you know exactly what you're getting back.
Choose a calculation mode
Pick the mode that matches your question, enter your values, and click Calculate.
Calculate cash back on one purchase and see your net cost after rewards.
Estimate annual rewards from your monthly spending and see if the card's fee is worth it.
Test two card offers on the same purchase — see which returns more cash back.
Cash back formula
Cash back = spend × rate%
Total reward = cash back + bonus
Net cost = spend − total reward
Is the annual fee worth it?
Only if gross rewards beat the fee. Break-even = annual fee ÷ rate% ÷ 12 per month. Use Annual mode to check your numbers.
How cash back rewards work
Cash back rewards return a percentage of your purchase back to you — as a statement credit, direct deposit, or equivalent points. A 2% flat-rate card returns $2 for every $100 you spend, regardless of category.
Some cards offer tiered rates by category (e.g., 5% on groceries, 1% on everything else). This calculator uses a single flat rate — enter the rate applicable to the specific category if your card is tiered.
Cash back formulas
Frequently asked questions
How do I calculate cash back on a purchase?
Multiply the purchase amount by the cash back rate. For $500 at 2%: $500 × 0.02 = $10 cash back. Add any flat bonus on top. Net cost = purchase amount − total reward.
Is an annual fee card worth it?
Only if your gross annual rewards exceed the fee. Break-even monthly spend = annual fee ÷ rate ÷ 12. For a $95 fee at 2%: $95 ÷ 0.02 ÷ 12 = $396/month. Spend above that and the card pays for itself. Use Annual Spending mode to test.
Why would a lower-rate card beat a higher-rate card?
A flat signup or promo bonus can make a lower-rate card more valuable on a single large purchase. A 1.5% card with a $25 bonus beats a 2% no-bonus card on any purchase below $5,000. Use Compare Offers to find the crossover point for your specific offers.
Does cash back count as taxable income?
Generally no — the IRS treats personal cash back as a rebate, not income. Business purchases may be different: if you deduct the full purchase cost and also receive cash back, you may need to reduce the deduction. Consult a tax advisor for business-use scenarios.
Related finance calculators
These tools pair naturally with cash back planning.
Disclaimer
This calculator provides estimates based on a flat cash back rate with no category limits, spend caps, or tiered structures. Actual rewards vary by card terms, merchant category codes, and redemption method. Always verify rates and conditions directly with your card issuer before making financial decisions.