diff --git a/pkg/currency/currency.go b/pkg/currency/currency.go
new file mode 100644
index 00000000..9951e180
--- /dev/null
+++ b/pkg/currency/currency.go
@@ -0,0 +1,42 @@
+package currency
+
+import (
+	"errors"
+	"fmt"
+	"math"
+)
+
+// Picodollar is a type to represent currency with 12 decimal precision
+type PicoDollar int64
+
+const (
+	PicoDollarsPerDollar = 1e12
+)
+
+// FromDollars converts a dollar amount (as a float) to Picodollars
+// This should mostly be used for testing, and real usage should be done purely in PicoDollars
+func FromDollars(dollars float64) (PicoDollar, error) {
+	if math.IsNaN(dollars) || math.IsInf(dollars, 0) {
+		return 0, errors.New("invalid dollar amount: must be a finite number")
+	}
+
+	picodollars := dollars * PicoDollarsPerDollar
+	if (picodollars < 0 && dollars > 0) || (picodollars > 0 && dollars < 0) {
+		return 0, errors.New("overflow: dollar amount too large")
+	}
+	return PicoDollar(picodollars), nil
+}
+
+// ToDollars converts PicoDollars to a dollar amount (as a float)
+func (p PicoDollar) toDollarsTestOnly() float64 {
+	return float64(p) / PicoDollarsPerDollar
+}
+
+// ToMicroDollars converts PicoDollars to MicroDollars (1e6 units per dollar)
+func (p PicoDollar) ToMicroDollars() int64 {
+	return int64(p / 1e6)
+}
+
+func (p PicoDollar) String() string {
+	return fmt.Sprintf("%.12f", p.toDollarsTestOnly())
+}
diff --git a/pkg/currency/currency_test.go b/pkg/currency/currency_test.go
new file mode 100644
index 00000000..cc2ef592
--- /dev/null
+++ b/pkg/currency/currency_test.go
@@ -0,0 +1,28 @@
+package currency
+
+import (
+	"testing"
+
+	"github.com/stretchr/testify/require"
+)
+
+func TestConversion(t *testing.T) {
+	initial, err := FromDollars(1.25)
+	require.NoError(t, err)
+	require.Equal(t, PicoDollar(1250000000000), initial)
+
+	converted := initial.toDollarsTestOnly()
+	require.Equal(t, 1.25, converted)
+}
+
+func TestString(t *testing.T) {
+	initial, err := FromDollars(1.25)
+	require.NoError(t, err)
+	require.Equal(t, "1.250000000000", initial.String())
+}
+
+func TestToMicroDollars(t *testing.T) {
+	initial, err := FromDollars(1.25)
+	require.NoError(t, err)
+	require.Equal(t, int64(1250000), initial.ToMicroDollars())
+}
diff --git a/pkg/fees/calculator.go b/pkg/fees/calculator.go
new file mode 100644
index 00000000..c3f35eea
--- /dev/null
+++ b/pkg/fees/calculator.go
@@ -0,0 +1,77 @@
+package fees
+
+import (
+	"fmt"
+	"time"
+
+	"github.com/xmtp/xmtpd/pkg/currency"
+)
+
+type FeeCalculator struct {
+	ratesFetcher IRatesFetcher
+}
+
+func NewFeeCalculator(ratesFetcher IRatesFetcher) *FeeCalculator {
+	return &FeeCalculator{ratesFetcher: ratesFetcher}
+}
+
+func (c *FeeCalculator) CalculateBaseFee(
+	messageTime time.Time,
+	messageSize int64,
+	storageDurationDays int64,
+) (currency.PicoDollar, error) {
+	if messageSize <= 0 {
+		return 0, fmt.Errorf("messageSize must be greater than 0, got %d", messageSize)
+	}
+	if storageDurationDays <= 0 {
+		return 0, fmt.Errorf(
+			"storageDurationDays must be greater than 0, got %d",
+			storageDurationDays,
+		)
+	}
+
+	rates, err := c.ratesFetcher.GetRates(messageTime)
+	if err != nil {
+		return 0, err
+	}
+
+	// Calculate storage fee components separately to check for overflow
+	storageFeePerByte := rates.StorageFee * currency.PicoDollar(messageSize)
+	if storageFeePerByte/currency.PicoDollar(messageSize) != rates.StorageFee {
+		return 0, fmt.Errorf("storage fee calculation overflow")
+	}
+
+	totalStorageFee := storageFeePerByte * currency.PicoDollar(storageDurationDays)
+	if totalStorageFee/currency.PicoDollar(storageDurationDays) != storageFeePerByte {
+		return 0, fmt.Errorf("storage fee calculation overflow")
+	}
+
+	return rates.MessageFee + totalStorageFee, nil
+}
+
+func (c *FeeCalculator) CalculateCongestionFee(
+	messageTime time.Time,
+	congestionUnits int64,
+) (currency.PicoDollar, error) {
+	if congestionUnits < 0 || congestionUnits > 100 {
+		return 0, fmt.Errorf(
+			"congestionPercent must be between 0 and 100, got %d",
+			congestionUnits,
+		)
+	}
+
+	if congestionUnits == 0 {
+		return 0, nil
+	}
+
+	rates, err := c.ratesFetcher.GetRates(messageTime)
+	if err != nil {
+		return 0, err
+	}
+
+	result := rates.CongestionFee * currency.PicoDollar(congestionUnits)
+	if result/currency.PicoDollar(congestionUnits) != rates.CongestionFee {
+		return 0, fmt.Errorf("congestion fee calculation overflow")
+	}
+	return result, nil
+}
diff --git a/pkg/fees/calculator_test.go b/pkg/fees/calculator_test.go
new file mode 100644
index 00000000..60f41a91
--- /dev/null
+++ b/pkg/fees/calculator_test.go
@@ -0,0 +1,85 @@
+package fees
+
+import (
+	"math"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/require"
+	"github.com/xmtp/xmtpd/pkg/currency"
+)
+
+const (
+	RATE_MESSAGE_FEE    = 100
+	RATE_STORAGE_FEE    = 50
+	RATE_CONGESTION_FEE = 200
+)
+
+func setupCalculator() *FeeCalculator {
+	rates := &Rates{
+		MessageFee:    RATE_MESSAGE_FEE,
+		StorageFee:    RATE_STORAGE_FEE,
+		CongestionFee: RATE_CONGESTION_FEE,
+	}
+	ratesFetcher := NewFixedRatesFetcher(rates)
+	return NewFeeCalculator(ratesFetcher)
+}
+
+func TestCalculateBaseFee(t *testing.T) {
+	calculator := setupCalculator()
+
+	messageTime := time.Now()
+	messageSize := int64(100)
+	storageDurationDays := int64(1)
+
+	baseFee, err := calculator.CalculateBaseFee(messageTime, messageSize, storageDurationDays)
+	require.NoError(t, err)
+
+	expectedFee := RATE_MESSAGE_FEE + (RATE_STORAGE_FEE * messageSize * storageDurationDays)
+	require.Equal(t, currency.PicoDollar(expectedFee), baseFee)
+}
+
+func TestCalculateCongestionFee(t *testing.T) {
+	calculator := setupCalculator()
+
+	messageTime := time.Now()
+	congestionPercent := int64(50)
+
+	congestionFee, err := calculator.CalculateCongestionFee(messageTime, congestionPercent)
+	require.NoError(t, err)
+
+	expectedFee := RATE_CONGESTION_FEE * congestionPercent
+	require.Equal(t, currency.PicoDollar(expectedFee), congestionFee)
+}
+
+func TestOverflow(t *testing.T) {
+	calculator := setupCalculator()
+
+	messageTime := time.Now()
+
+	// Test overflow in CalculateBaseFee
+	messageSize := math.MaxInt64
+	storageDurationDays := math.MaxInt64
+
+	_, err := calculator.CalculateBaseFee(
+		messageTime,
+		int64(messageSize),
+		int64(storageDurationDays),
+	)
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "storage fee calculation overflow")
+}
+
+func TestInvalidCongestionPercent(t *testing.T) {
+	calculator := setupCalculator()
+
+	messageTime := time.Now()
+
+	_, err := calculator.CalculateCongestionFee(messageTime, int64(101))
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "congestionPercent must be between 0 and 100")
+
+	_, err = calculator.CalculateCongestionFee(messageTime, int64(-1))
+	require.Error(t, err)
+	require.Contains(t, err.Error(), "congestionPercent must be between 0 and 100")
+}
diff --git a/pkg/fees/fixedRates.go b/pkg/fees/fixedRates.go
new file mode 100644
index 00000000..8596ef74
--- /dev/null
+++ b/pkg/fees/fixedRates.go
@@ -0,0 +1,17 @@
+package fees
+
+import "time"
+
+// A fixed fee schedule that doesn't rely on the blockchain.
+// Used primarily for testing, and until we have fees onchain.
+type FixedRatesFetcher struct {
+	rates *Rates
+}
+
+func NewFixedRatesFetcher(rates *Rates) *FixedRatesFetcher {
+	return &FixedRatesFetcher{rates: rates}
+}
+
+func (f *FixedRatesFetcher) GetRates(_messageTime time.Time) (*Rates, error) {
+	return f.rates, nil
+}
diff --git a/pkg/fees/interface.go b/pkg/fees/interface.go
new file mode 100644
index 00000000..92e4a2d2
--- /dev/null
+++ b/pkg/fees/interface.go
@@ -0,0 +1,33 @@
+package fees
+
+import (
+	"time"
+
+	"github.com/xmtp/xmtpd/pkg/currency"
+)
+
+// Rates containt the cost for each fee component at a given message time.
+// Values in the rates struct are denominated in USD PicoDollars
+type Rates struct {
+	MessageFee    currency.PicoDollar // The flat per-message fee
+	StorageFee    currency.PicoDollar // The fee per byte-day of storage
+	CongestionFee currency.PicoDollar // The fee per unit of congestion
+}
+
+// The RatesFetcher is responsible for loading the rates for a given message time.
+// This allows us to roll out new rates over time, and apply them to messages consistently.
+type IRatesFetcher interface {
+	GetRates(messageTime time.Time) (*Rates, error)
+}
+
+type IFeeCalculator interface {
+	CalculateBaseFee(
+		messageTime time.Time,
+		messageSize int64,
+		storageDurationDays int64,
+	) (currency.PicoDollar, error)
+	CalculateCongestionFee(
+		messageTime time.Time,
+		congestionUnits int64,
+	) (currency.PicoDollar, error)
+}