diff --git a/router/protocol_fee_swap_test.gno b/router/protocol_fee_swap_test.gno
new file mode 100644
index 00000000..43999b39
--- /dev/null
+++ b/router/protocol_fee_swap_test.gno
@@ -0,0 +1,80 @@
+package router
+
+import (
+	"testing"
+
+	pusers "gno.land/p/demo/users"
+
+	u256 "gno.land/p/gnoswap/uint256"
+)
+
+func TestHandleSwapFee(t *testing.T) {
+	token0 := "token0"
+
+	mockToken := &struct {
+		GRC20Interface
+	}{
+		GRC20Interface: MockGRC20{
+			TransferFn:     func(to pusers.AddressOrName, amount uint64) {},
+			TransferFromFn: func(from, to pusers.AddressOrName, amount uint64) {},
+			BalanceOfFn:    func(owner pusers.AddressOrName) uint64 { return 1000000 },
+			ApproveFn:      func(spender pusers.AddressOrName, amount uint64) {},
+		},
+	}
+
+	registerGRC20ForTest(t, token0, mockToken)
+	defer unregisterGRC20ForTest(t, token0)
+
+	tests := []struct {
+		name           string
+		amount         *u256.Uint
+		swapFeeValue   uint64
+		isDry          bool
+		expectedAmount *u256.Uint
+	}{
+		{
+			name:           "zero swap fee",
+			amount:         u256.NewUint(1000),
+			swapFeeValue:   0,
+			isDry:          false,
+			expectedAmount: u256.NewUint(1000),
+		},
+		{
+			name:           "normal swap fee calculation (0.15%)",
+			amount:         u256.NewUint(10000),
+			swapFeeValue:   15,
+			isDry:          false,
+			expectedAmount: u256.NewUint(9985), // 10000 - (10000 * 0.15%)
+		},
+		{
+			name:           "Dry Run test",
+			amount:         u256.NewUint(10000),
+			swapFeeValue:   15,
+			isDry:          true,
+			expectedAmount: u256.NewUint(9985),
+		},
+		{
+			name:           "large amount swap fee calculation",
+			amount:         u256.NewUint(1000000),
+			swapFeeValue:   15,
+			isDry:          false,
+			expectedAmount: u256.NewUint(998500), // 1000000 - (1000000 * 0.15%)
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			originalSwapFee := swapFee
+			swapFee = tt.swapFeeValue
+			defer func() {
+				swapFee = originalSwapFee
+			}()
+
+			result := handleSwapFee(token0, tt.amount, tt.isDry)
+
+			if !result.Eq(tt.expectedAmount) {
+				t.Errorf("handleSwapFee() = %v, want %v", result, tt.expectedAmount)
+			}
+		})
+	}
+}