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PayPal fees can be confusing. Our calculator helps you understand how much you’ll pay in fees for common transaction methods.
Understanding PayPal Fees
PayPal is a popular, easy-to-use payment platform used by businesses worldwide to send and receive payments. There are a number of fees associated with using PayPal – the specific fee structure depends on the transaction type, amount, currency, and location. Additionally, PayPal charges fees for some additional services, such as chargebacks and refunds.
In this article, we'll provide an overview of PayPal fees for businesses, how to calculate them, and how to reduce them.
How much does PayPal charge?
PayPal’s most common rate is 3.49% + a fixed fee per transaction.
To give you an idea of how much PayPal charges for other common transactions, here's a table of PayPal's fees for domestic (United States) commercial transactions:
*Information accurate as of July 11, 2023
As mentioned earlier, fees can vary based on your location and the currency involved in the transaction. For example, if you're a US-based business owner receiving international payments, PayPal charges a percentage fee of 1.5% in addition to the fees shown in the table above.
How to calculate PayPal fees
To calculate PayPal fees for a given transaction, use our PayPal fee calculator tool. Simply enter the transaction amount, whether the payment is domestic or international, and the type of transaction (online, in-person, or international) to see how much you’ll be charged by PayPal.
To manually calculate PayPal fees manually, use the following formulas:
PayPal Fee
(Transaction Amount x (Percentage Fee/100)) + Fixed Fee
For example, if you are receiving a domestic invoice payment of $1,000, the PayPal fee would be ($1,000 x (3.49 ÷ 100)) + $0.49, or $35.39.
What to ask for to receive your full desired amount
(Transaction Amount + Fixed Fee) ÷ (1 – (Percentage Fee/100))
Continuing with the previous example, if you want to receive a total amount of $1,000, you should charge ($1,000 + $0.49) ÷ (1 - (3.49 ÷ 100)), or $1,036.67.
Note that PayPal's currency conversion fee may also apply if the payment is in a currency other than your primary currency.
Other PayPal fees and costs
In addition to transaction fees, PayPal also charges fees for some additional services. For example, if a customer disputes a transaction and requests a chargeback, PayPal charges a $20 fee per chargeback. If you issue a refund to a customer, PayPal does not charge a fee, but the original transaction fee is not refunded.
PayPal also charges fees for currency conversion. If you receive a payment in a different currency than your primary currency, PayPal will convert the payment to your primary currency and charge a fee for the conversion. The fee varies depending on the currencies involved and the conversion rate used.
How to reduce PayPal fees
- Negotiate lower fees: If you're a high-volume seller, you may be able to negotiate lower fees with PayPal.
- Use PayPal's micropayments feature: If you sell items with a low value (under $10), you can use PayPal's micropayments feature, which charges a lower fee of 5% + $0.05 per transaction.
- Offer discounts for non-PayPal payments: To encourage customers to pay with other methods, you can offer a discount for payments made with a credit card or bank transfer.
- Consider other payment gateways: While PayPal is a popular payment gateway, there are other options available that may offer lower fees.
- Use Novo’s invoicing software: If you primarily accept payments through invoicing, consider Novo’s invoicing software – it’s totally free to use, and you can create and send an unlimited number of invoices.
Novo and PayPal
Seamlessly connect PayPal with your Novo account. By signing up for a Novo account and connecting PayPal, you’ll gain:
- Access to our robust suite of business banking tools
- Ability to integrate with other tools you love, including Stripe, Shopify, eBay, Amazon, and Etsy
- Ability to accept customer invoice payments through PayPal
- Access to as much as $3,000 in savings with our Perks program
Interested? Apply for a free Novo business checking account today – the process takes 10 minutes or less.
Novo is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A. Member FDIC.
Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.
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