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PayPal Fees: How Much Are They and How Do They Work?

PayPal is one of the largest online payments systems, with 227 million active accounts around the globe. It’s also a popular option for accepting payments among online sellers.

But as with any payments system, you’ll need to factor transaction fees into your pricing and the cost of running your business. Ahead, learn how to calculate PayPal fees, what cut PayPal takes, and how PayPal fees work with Shopify Payments.

What are PayPal fees?

PayPal fees are the costs associated with using the platform to process payments and send or receive money. Fees are applied either as a percentage of the transaction amount or as a flat fee, depending on how you’re sending or receiving money.

Why does PayPal charge a fee?

PayPal charges a fee for merchants to use its platform. PayPal is a for-profit company, so it looks to earn a profit after paying all of its operating expenses. PayPal does not charge a fee for consumer-to-consumer money transfers.

How to calculate PayPal fees

If you’re a consumer purchasing goods and services in the US you don’t pay any fees for using PayPal, but if you’re a merchant selling goods or services, you’ll have to pay a fee. Often this is charged as a percentage of the transaction plus a fixed fee.

Fees vary depending on the transaction type, seller location and currency, and buyer location and currency.

If you’re selling in the US, you’re charged 2.99% of the transaction amount in order to receive money via PayPal transfer. Then, if you’re processing a credit card, you’ll have to pay 2.99% plus a 49¢ flat fee (this amount is based on the currency of the payment). For example, a payment of $50 will be charged a $1.99 processing fee ($1.50 + 49¢).

When receiving payments from outside of the US, you’re charged the same domestic fee plus an additional 1.5% of the transaction and another fixed fee based on the currency.

Screenshot of PayPal international transaction fees

Disclaimer: These numbers are accurate as of the published date, but may be subject to change.

PayPal fees calculators

You can use a PayPal fee calculator instead of relying on your own calculations. There are many free tools out there, including:

  • NerdWallet PayPal Fee Calculator. Estimate your costs for digital checkout, in-person Zettle transaction, or standard debit or credit card payment.
  • The Fee Calculator. In addition to PayPal fees, you can also toggle over to Stripe to see how those fees compare.
  • SaleCalc. SaleCalc offers more data inputs for different types of PayPal transactions; you can also see fees for a variety of third-party marketplaces.
  • Wise PayPal Fees Calculator. Tailored for merchants based anywhere in the world, selling to customers anywhere in the world.

How much does PayPal take in fees?

It’s free to create a PayPal business account, but it takes 3.49% of the transaction amount plus a fixed fee of 49¢ in the US for checkout payments and invoicing. This is 2.99% plus 49¢ for credit and debit card payments and money transfers. Other fees for US-based merchants break down as follows:

PayPal fees for sending money

PayPal charges 2.99% of the total transaction amount when sending or receiving money in exchange for goods and services. This is free, or 0%, for consumer-to-consumer transactions.

When it comes to sending and receiving money for donation purposes, PayPal charges 2.89% plus 49¢ per transaction via the Donate button or PayPal checkout for donations. Listed PayPal fundraisers have a 2.99% fee, while unlisted fundraisers have none.

PayPal Payouts, an option to send money to multiple people at once, has a 2% transaction fee.

PayPal transaction fees

The two core PayPal transaction fees are:

  1. Credit and debit card payments: 2.99% + 49¢
  2. Online checkout: 3.49% + 49¢

Fees associated with in-person transactions via the PayPal Here card reader are 2.7% for card present, in-store, and QR code transactions. Manually keyed in payments have a transaction fee of 3.5% plus 49¢. The same rates apply for charity transactions.

The point-of-sale (POS) system PayPal Zettle has a transaction fee of 2.29% plus 9¢ for invoicing and card present payments, as well as 3.49% plus 9¢ for card not present transactions.

Payflow Pro is PayPal’s optional payment gateway. Using it comes with a transaction fee of 10¢ per instance. Monthly fees also include $25 for Payflow Pro, $10 for recurring billing, and $10 for additional fraud protection services (plus a 5¢ to 10¢ transaction fee).

PayPal consumer fees

Generally speaking, consumers don’t have to pay any fees to send money, pay for products or services, or donate money to causes they care about. However, if you want to use a credit card instead of a linked bank account or debit card to send money, you’ll have to pay 2.9% plus 30¢ to do so. International transactions have an additional 5% fee, with a minimum of 99¢ per sale, and maxing out at $4.99 each).

PayPal consumer fees also apply to currency conversion fees or transferring cryptocurrency—the latter of which breaks down like this:

Screenshot of chart showing PayPal cryptocurrency fees

Receiving donations as a consumer may also come with a cost. PayPal charges 2.89%, plus a fixed fee of 49¢ for US-based users for using the PayPal checkout Donate button. Listed fundraisers pay 2.99%, while unlisted fundraisers pay nothing. Receiving international donations comes with an additional 1.5% fee.

Withdrawals are free for consumer users, though there’s an option to pay 1.75% extra for instant payout, or $1.50 to receive a paper check in the mail.

PayPal business fees

While it’s free to create a PayPal business account, there are potential fees in addition to the ones listed above. Chargebacks, for example, are $20 per instance for US-based sellers. And dispute fees are $15 per instance—$30 for high volume disputes.

Expedited withdrawals and money transfers may also incur fees. It’s free to withdraw money to your business bank account, but it may take up to three business days. Instant transfers have a 1.5% fee.

PayPal international fees

PayPal charges the applicable transaction and/or seller fees, as well as an additional 1.5% for all international commercial, donation, charity, and micropayments transactions. Currency conversion fees are either 3% or 4%, depending on the product or service.

PayPal fees for products

PayPal has other options and products to allow for different types of payment methods and transactions, including:

  • Invoice payments: 3.49% + 49¢
  • QR code: 2.4% + 5¢ for transactions $10 and below; 1.9% + 10¢ for anything above $10; 2.29% + 9¢ when using a third-party integration
  • Venmo payments: 3.49% + 49¢
  • Alternative payment methods: 2.59% + 49¢
  • Uncategorized commercial transactions: 3.49% + 49¢
  • Campaign fee—store cash commercial transactions: 8%
  • Micropayments (sort of like what buy now, pay later (BNPL) companies do): 4.99% + 49¢
  • Charity transactions (requires approval): 1.99% + 49¢

How PayPal fees work with Shopify Payments

PayPal Express is a supported payment gateway for Shopify merchants and is easy to integrate into your store. When you set up your Shopify store, Shopify will create a PayPal Express Checkout account for you, using the email address associated with your Shopify account.

If you already have a PayPal account with that email address, you’ll receive payments from orders made with PayPal right away. If you don’t, you’ll have to finish setting up your PayPal account. You can add your email address to your existing PayPal account or create a new PayPal business account with the same email address you use to sign in to your store.

If you’re using Shopify Payments and PayPal Express together as your payment gateways, you pay only the fees for the payment gateway that your customer uses to check out. You won’t be double billed.

For more on accepting Paypal payments in your Shopify store, you can check out our help docs or contact support.

PayPal fees in 2023: conclusion

If you don’t accommodate the payment options your shoppers prefer, you risk losing them to competitors who do. It’s up to merchants to account for PayPal fees when they price their products to ensure sustainable profitability. Shopify users can create simple friction-free PayPal integrations for customers to complete their purchases.

PayPal fees FAQ

What are PayPal transaction fees?

  • Credit and debit card payments: 2.99% + 49¢ per transaction
  • Online checkout: 3.49% + 49¢ per transaction

How do you avoid PayPal fees?

You avoid PayPal fees by using it as a consumer to make purchases and/or donations. Businesses can’t avoid PayPal fees without breaching their PayPal user agreement.

How much are PayPal seller fees?

  • Credit and debit card payments: 2.99% + 49¢ per transaction
  • Online checkout: 3.49% + 49¢ per transaction
  • Invoice payments: 3.49% + 49¢
  • QR code: 2.4% + 5¢ for transactions $10 and below; 1.9% + 10¢ for anything above $10; 2.29% + 9¢ when using a third-party integration
  • Venmo payments: 3.49% + 49¢
  • Alternative payment methods: 2.59% + 49¢
  • Uncategorized commercial transactions: 3.49% + 49¢
  • Campaign fee—store cash commercial transactions: 8%
  • Micropayments: 4.99% + 49¢
  • Charity transactions (requires approval): 1.99% + 49¢

Why does PayPal charge a fee?

PayPal charges a fee for merchants to use its platform. PayPal is a for-profit company, so it looks to earn a profit after paying all of its operating expenses. PayPal does not charge a fee for consumer-to-consumer money transfers.

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