> ## Documentation Index
> Fetch the complete documentation index at: https://docs.arc.io/llms.txt
> Use this file to discover all available pages before exploring further.

# How bridge fees work

> How custom fees, CCTP protocol fees, and Forwarding Service fees apply when bridging USDC with the App Kit SDK

This guide explains which fees apply when bridging, how funds move through a
transaction, and the best practices to follow when
[implementing custom fees](/app-kit/tutorials/bridge/collect-bridge-fee).

## Fee breakdown

The following fees can apply:

| Fee                                      | When it applies                                                                                                                           | Amount                                                                                                                                               | Recipient                                                                   |
| ---------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- |
| Custom fee                               | Conditionally. When you [implement custom bridge fees](/app-kit/tutorials/bridge/collect-bridge-fee).                                     | You define (on top of the bridge amount).                                                                                                            | 90% to your fee recipient; 10% to Arc                                       |
| Cross-Chain Transfer Protocol (CCTP) fee | Conditionally. On [`FAST`](/app-kit/tutorials/bridge/configure-transfer-speed) transfers only; `SLOW` (Standard) transfers skip this fee. | Varies by source blockchain. See [CCTP fees](https://developers.circle.com/cctp/technical-guide#fees).                                               | [Circle CCTP](https://developers.circle.com/cctp) (the underlying protocol) |
| Forwarding Service fee                   | Conditionally. When you enable the [Forwarding Service](/app-kit/tutorials/bridge/use-forwarding-service).                                | Per [Forwarding Service fees](https://developers.circle.com/cctp/concepts/forwarding-service#fees-and-execution). Deducted from mint on destination. | [Circle CCTP](https://developers.circle.com/cctp)                           |

## How funds flow through a transfer

The following example shows what happens when a user wants 1,000 USDC to arrive
at the destination after a Fast Transfer, with a 10 USDC custom fee on that
transfer, and the
[Forwarding Service](/app-kit/tutorials/bridge/use-forwarding-service) enabled.
The bridge amount is 1,000.30 USDC so that after the example CCTP protocol fee
(0.10 USDC) and Forwarding Service fee (0.20 USDC), 1,000 USDC is credited to
the recipient:

<Steps>
  <Step title="User initiates the bridge transfer on the source chain">
    The user initiates a 1,000.30 USDC bridge transfer on the source blockchain
    (sized for 1,000 USDC net to the destination after the example fees).
  </Step>

  <Step title="You add the custom fee">
    You add a 10 USDC (about 1%) custom fee.
  </Step>

  <Step title="Source wallet signs the total debit">
    The source wallet signs a transaction for 1,010.30 USDC (bridge amount + custom
    fee).
  </Step>

  <Step title="Source chain splits the custom fee">
    The 10 USDC custom fee is split on the source blockchain:

    * Arc receives 1 USDC (10%).
    * Your fee recipient receives 9 USDC (remaining 90%).
  </Step>

  <Step title="Bridge amount is forwarded to CCTP">
    The 1,000.30 USDC bridge amount is forwarded to CCTP.
  </Step>

  <Step title="CCTP applies the Fast Transfer protocol fee">
    CCTP takes a protocol fee (0.10 USDC in this example) for a Fast Transfer.
  </Step>

  <Step title="Forwarding Service applies the destination mint fee">
    The Forwarding Service deducts its fee (0.20 USDC in this example) from the
    amount to be minted on the destination blockchain.
  </Step>

  <Step title="Destination wallet receives the net amount">
    The destination wallet receives 1,000.00 USDC on the destination blockchain.
  </Step>
</Steps>

This flow is illustrated in the following diagram:

```mermaid theme={null}
flowchart TB
    Source["*Source wallet*#160;"] --> Approved["Approved amount:<br/>1,010.30 USDC"]
    Approved --> CustomFee["Custom fee:<br/>-10 USDC"]
    Approved --> Transfer["Bridge amount:<br/>1,000.30 USDC"]
    CustomFee --> ArcShare["10% of custom fee:<br/>1 USDC"]
    ArcShare --> Arc["*Arc*#160;"]
    CustomFee --> PartnerShare["90% of custom fee:<br>9 USDC"]
    PartnerShare --> Partner["*Your fee recipient*#160;"]
    Transfer --> CCTP["*CCTP*#160;"]
    CCTP --> Transfer2["Net amount after fees:<br/>1,000.00 USDC"]
    Transfer2 --> Destination["*Destination wallet*#160;"]
    CCTP --> FastFee["CCTP protocol fee (example):<br/>-0.10 USDC"]
    CCTP --> ForwarderFee["Forwarding Service fee (example):<br/>-0.20 USDC"]
    FastFee --> Circle["*Circle*#160;"]
    ForwarderFee --> Circle
```

## Best practices for custom fees

Follow these best practices when implementing custom fees:

* Treat the custom fee as an amount added on top of the bridge transfer. Do not
  subtract it from the bridge amount.
* Validate that the user's wallet balance covers both the bridge amount and the
  custom fee. The following code shows an example balance check:

```typescript TypeScript theme={null}
const requiredBalance = parseFloat(amount) + parseFloat(customFee);
if (userBalance < requiredBalance) {
  throw new Error(`Insufficient balance. Need ${requiredBalance} USDC`);
}
```

* Use a fee recipient address on the source blockchain. Do not use an address on
  the destination.
* In your UI, display the following to the user before they confirm the
  transaction:
  * The total source wallet debit: bridge amount + custom fee
  * The full fee breakdown: bridge amount, custom fee, CCTP Fast Transfer fee
    (if applicable), and Forwarding Service fee (if using the
    [Forwarding Service](/app-kit/tutorials/bridge/use-forwarding-service))
* Return human-readable decimal strings. For example, `10` rather than
  `10000000` for 10 USDC. The App Kit SDK handles base-unit conversion
  internally.