PayPal Fees Explained: How to Calculate What You Actually Receive

If a client sends you $1,000 through PayPal, you do not receive $1,000. Depending on where you both are, how the payment was sent and which currency it arrived in, you might receive $965, or $950, or less. Freelancers who invoice a round number and forget the fee lose that difference on every job; sellers who price without it lose margin on every order. The maths is simple once you know the structure, and this guide walks through it with the numbers that apply to the most common cases.

Fees quoted below are PayPal’s published rates at the time of writing. PayPal revises them periodically and they differ by country, so treat the figures as illustrative and use the PayPal Transaction Fee Calculator, which is kept current, for a live number.

How the fee is structured

Almost every PayPal fee has two parts:

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Fee = (amount × percentage) + fixed fee

The percentage depends on the payment type and whether it crosses a border. The fixed fee depends on the currency the payment is received in (for example, $0.49 for USD, €0.39 for EUR, £0.39 for GBP). Because of the fixed part, small payments lose a much bigger share than large ones: on a $5 payment the fixed fee alone is nearly 10%.

The main fee types

Payment type	Domestic (US example)	Cross-border addition
Goods & Services (standard commercial)	3.49% + $0.49	+1.50%
Invoicing	3.49% + $0.49	+1.50%
Micropayments (opt-in, for items under ~$10)	4.99% + $0.09	+1.50%
Friends & Family, funded by PayPal balance or bank	Free	Not available cross-border in many countries
Friends & Family, funded by card	2.90% + $0.30 (paid by sender)	—
QR code (in-person)	1.90% + $0.10 to 2.29% + $0.09	—

On top of these, currency conversion adds 3–4% above the wholesale exchange rate whenever the payment is converted, either by the sender or when you withdraw. This is the fee people most often miss, because it is hidden inside the exchange rate rather than shown as a line item.

Worked example 1: US freelancer, US client

Invoice: $1,000. Domestic Goods & Services.

Fee = ($1,000 × 3.49%) + $0.49 = $34.90 + $0.49 = $35.39

You receive $964.61.

Worked example 2: Pakistan-based freelancer, UK client, paid in GBP

Invoice: £800. Cross-border commercial payment received into a non-UK account.

Percentage = local commercial rate (say 4.40%) + 1.50% cross-border = 5.90%

Fee = (£800 × 5.90%) + £0.39 = £47.20 + £0.39 = £47.59

You receive £752.41, and if you then withdraw in local currency, conversion at roughly 3.5% above mid-market costs another ~£26. Effective total: about 9.2%, or £73 on an £800 job. This is why cross-border freelancers should quote in the client’s currency and hold the balance until they need to convert, or compare with a service like Wise or Payoneer for large invoices.

Worked example 3: Small item, and why micropayments exist

Sale: $4.00 digital download, standard rate.

Fee = ($4 × 3.49%) + $0.49 = $0.14 + $0.49 = $0.63, which is 15.7%.

Same sale on the micropayment rate: ($4 × 4.99%) + $0.09 = $0.20 + $0.09 = $0.29, or 7.2%. Micropayment pricing wins below about $12; above that the standard rate is cheaper. PayPal applies one or the other to your whole account, so choose based on your typical order value.

The reverse calculation: how much to invoice to receive a set amount

If you want to net a specific figure, you cannot just add the fee to it, because the fee is also charged on the fee. The formula is:

Amount to invoice = (net you want + fixed fee) ÷ (1 − percentage)

To net $1,000 domestically: ($1,000 + $0.49) ÷ (1 − 0.0349) = $1,000.49 ÷ 0.9651 = $1,036.67. Invoice that, pay $36.67 in fees, keep $1,000. The fee calculator has a “reverse” mode that does this for you.

Six ways to pay less

1. Batch small payments. One $100 invoice costs $3.98; ten $10 invoices cost $8.39.
2. Get paid in the currency you hold. Avoid a conversion you did not need.
3. Keep a multi-currency balance and convert on your own schedule, or move money out via a cheaper FX service.
4. Switch to micropayments if your average order is under $10.
5. Use PayPal Checkout / Pay Later integration rates if you run an online store; some are lower than the standard invoice rate.
6. Negotiate merchant rates once monthly volume passes roughly $3,000; PayPal offers reduced percentages on application.

Whatever you decide, build the fee into your pricing instead of absorbing it invisibly. Checking a quote takes ten seconds with the calculator and removes the surprise from every payout. For percentage maths in general, the Online Percentage Calculator handles the “what percent of X is Y” cases that come up around pricing.

Frequently asked questions

Who pays the PayPal fee, the sender or the receiver?

For Goods & Services and invoices, the receiver. For card-funded Friends & Family, the sender. You can ask a client to “cover the fee”, but PayPal’s terms prohibit surcharging in some countries, so build it into the price instead.

Are PayPal fees the same in every country?

No. Percentages and fixed fees differ by the receiving account’s country and by currency. Always check the rate for your own account.

Is there a fee to receive money from friends and family?

Not if the sender uses a bank account or PayPal balance within the same country. Card-funded and cross-border personal payments do carry fees.

Does PayPal charge to withdraw to my bank?

Standard withdrawals to a local bank are free in most countries; instant transfers and withdrawals in a different currency carry fees.