Definition
Shipping and handling is a charge on an invoice that covers the cost of delivering goods and preparing them for shipment, including packing materials and labor. It usually appears as its own line item after the product lines so the client can see delivery costs separately from the price of the goods.
Also called: S&H, Delivery charge, Freight charge
Shipping and handling in practice
Whether shipping is taxable depends on where you sell. Some US states tax shipping and handling charges, others do not, and some only tax them when the goods themselves are taxable. VAT systems generally treat delivery as part of the same supply as the goods.
Frequently Asked Questions
Should shipping be a separate line on the invoice?
Yes. A separate line makes the delivery cost clear, helps the client compare suppliers, and makes it easier to apply the right sales tax treatment.
Can I charge more for shipping than it actually cost me?
Generally yes, since "handling" covers packing, materials, and labor beyond the carrier fee, but the charge should be disclosed up front and reasonable. Be aware that in some US states, marking up delivery can change how it is taxed.
Related terms
- Line item A line item is a single row on an invoice that describes one product or service, with its quantity, unit price, and line total.
- Subtotal The subtotal is the sum of all line item totals on an invoice before taxes, discounts, and other adjustments are applied.
- Sales tax Sales tax is a consumption tax added to the price of goods and some services at the point of sale, collected by the seller and remitted to the state or local government.
- Incoterms Incoterms are standard three-letter trade terms published by the International Chamber of Commerce that define who pays for shipping, insurance, and customs, and where risk passes from seller to buyer in an international sale.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.