Points are calculated based on your chosen earn rate and are issued on whole pounds only. The fee is charged only on the part of the bill that can earn points.
Below is an example of how this works for the bronze tier with a fee of 0.5% and 0.75 points per £1:
For example, a £101 payment on the bronze tier would have a fee of 0.5%. Only the £100 part would be eligible, as 0.5% of £1 would be 0.5p which isn't possible to pay, so your overall fee would be £0.50. This means you would earn 75 points as, the £1 part of the bill is exempt from earning rewards.