Funding fee calculation
How funding fees work: amounts, signs and settlement
Annualised rates help comparisons. Account payments need a settlement-by-settlement calculation using the contract's notional value, settled rate and your position side.
Assume a settlement notional of 10,000 USDT and a settled rate of +0.01%. The payment is 1 USDT: the long pays and the short receives. At −0.01%, the direction reverses. Throughout this guide, received cash is positive and paid cash is negative.
Try a single funding payment
Enter a linear contract’s notional value at settlement and the actual rate for that payment.
Default example: 10,000 × 0.01% = 1. This estimates one funding payment, excluding trading fees, price P&L and future settlements. Eligibility follows the venue’s position and settlement rules.
One funding payment: notional first, then the rate
Use notional measured under the contract's settlement rules and that settlement's actual rate. Enter 0.01% as 0.0001 in multiplication, not 0.01. This hypothetical example uses Bybit's mark-price convention for USDT linear perpetuals.
Settlement notional N = base-asset quantity Q × settlement mark price P
Long cash flow = −N × r; short cash flow = +N × r (r is the signed rate)
| Input | Assumed value | Result |
|---|---|---|
| Base-asset quantity | 0.2 BTC | Quantity is not margin |
| Settlement mark price | 50,000 USDT / BTC | 10,000 USDT notional |
| Settled rate | +0.01% | 10,000 × 0.0001 = 1 USDT |
Notional is not margin, and the entry price need not be the settlement valuation. If quantity stays at 0.2 BTC but the settlement price rises to 55,000 USDT, the same rate produces a 1.10 USDT payment.
Who pays when funding is negative?
| Settled funding rate | Long cash flow | Short cash flow |
|---|---|---|
| +0.01% | −1 USDT (paid) | +1 USDT (received) |
| −0.01% | +1 USDT (received) | −1 USDT (paid) |
| 0% | 0 | 0 |
Negative funding does not mean that a short is profitable: it means shorts pay longs at that settlement. Price P&L is separate. A venue statement may show a positive number for an expense, the opposite of our cash-flow sign convention. Match the paid or received label.
How do funding fees differ from trading fees?
They are separate cash flows. Funding depends on a qualifying position at settlement; trading fees depend on execution. Opening and closing a trade can incur trading fees even if no funding settlement occurs during the position.
| Compare | Funding payment | Trading fee |
|---|---|---|
| Trigger | Position qualifies for a funding settlement | An entry, exit or rebalance order executes |
| Measurement | Settlement notional × actual settled funding rate | Executed notional × applicable account fee rate |
| Payment direction | Positive: longs pay shorts; negative: reversed | Usually paid to the venue; rebates and allocation follow its rules |
| Rules to check | Settlement time, eligibility, valuation and rate period | Maker/taker execution, account fee tier and contract rules |
There is no single trading fee for every venue or account. An order type alone does not establish maker or taker execution. Convert settlement currency and contract units under the relevant rules, and count both entry and exit fees on each leg of a complete two-leg trade.
Does leverage multiply the funding fee again?
For the same notional position and settled rate, changing leverage does not add another multiplier to the fee. It changes initial margin and the fee's size relative to that margin. This example simplifies initial margin to notional divided by leverage, excluding fees and other margin requirements.
| Leverage | Simplified initial margin | Payment / margin |
|---|---|---|
| 10× | 1,000 USDT | 1 USDT / 0.10% |
| 20× | 500 USDT | 1 USDT / 0.20% |
If instead you keep 1,000 USDT margin and expand notional from 10,000 to 20,000 USDT, the payment becomes 2 USDT because the position grew. A smaller margin cushion is also consumed sooner by adverse prices or continued payments. Our liquidation estimator does not automatically include future funding.
Mark, oracle and inverse-contract values are different
| Contract example | Notional measurement | Confirm |
|---|---|---|
| Bybit USDT / USDC linear | Base quantity × mark price | Settlement currency and size units |
| Hyperliquid | Position size × oracle price | Actual hourly funding rate |
| Lighter | Position size × index price | Actual hourly funding rate |
| Bybit inverse perpetual | USD contract quantity ÷ mark price | Payment is in the base asset |
Position size times mark price is not a universal settlement formula. For inverse contracts, also check contract face value and multiplier; inserting a USDT linear notional can mix currencies and units. The small example tool above accepts an already-correct settlement notional and does not infer these rules.
One hour of holding is not automatically one eighth of an 8h fee
Do not divide an 8h rate by eight and assume that is the payment for holding one hour. Eligibility depends on the settlement mechanism and whether you hold a position at settlement; contract frequency can change. Hyperliquid and Lighter settle hourly, while some displayed rates can be 8h equivalents. Confirm the period first.
Simple annualised rate = period rate × 8,760 ÷ hours in that period
0.01% per 8h → 10.95% simple annualised
The 10.95% figure extrapolates one unchanged rate across a year for comparison. It is neither this payment nor a promised return on margin. For cash amounts use the actual settled rate, then sum individual settlements. Check venue timing rules when entering or closing close to a settlement boundary.
Why historical annualisation does not match an account statement
A historical ranking summarises collected contract rates. Your statement also depends on eligibility at each settlement, position size, valuation and side. Multiplying one notional by a sum of rates only works if notional stays constant and the sample includes all your relevant settlements.
Total cash flow = sum of eligible settlement cash flows = Σ (side sign × Nᵢ × rᵢ)
- Match the exact contract, time zone and settlement timestamp. A predicted rate is not a settled record.
- Match size, valuation and payment direction at each point. Resizing, changing side or price moves changes the amount.
- Check the first and last records, record count, covered hours and changes in settlement frequency. Missing observations are unknown, not 0%.
- This site's ranking admission threshold is not a completeness guarantee. It can use known samples covering at least half the window; inclusion does not establish a complete 30 days.
Common questions
What is a 0.01% funding fee on 10,000 USDT?
Assuming the settlement notional is exactly 10,000 USDT, the amount is 1 USDT. At a positive rate the long pays and the short receives; a negative rate reverses the direction. This excludes trading fees and price P&L.
Are funding fees based on margin or position value?
They use position notional as measured under the contract's settlement rules. Do not multiply the same position's fee by leverage again. The amount changes if higher leverage is also used to increase the position.
Does negative funding mean shorts receive money?
Usually the reverse: negative funding means shorts pay longs at that settlement. Account fee signs can differ, so check whether the amount was paid or received.
Does 100% annualised funding guarantee a 100% return in a year?
No. A current annualised rate extrapolates unchanged funding without compounding. Rates and positions can change, and the figure excludes price P&L and trading costs. It is not a return on margin.
Can missing historical funding records be filled with zero?
No. Missing means unknown. Check official records, actual settlement frequency and covered time; a partial sample's annualisation is not personal income over a complete period.
Official sources and scope
These sources support the venue rules explained here. Worked numbers are our calculations under stated assumptions, not venue quotes. Rules can change; the specific contract and account settlement record take precedence.