💳 PayPal is one of the world’s most widely used online payment platforms, trusted by freelancers, small businesses, and eCommerce stores. However, not all transactions are free – and understanding how PayPal calculates its fees helps you price your services or products more accurately.
Let’s break it all down step-by-step.
🌍 Types of PayPal Transactions
PayPal applies different fee structures based on what kind of transaction you’re making:
- Personal: Sending or receiving money between friends or family.
- Commercial: Payments for goods and services.
- International: Payments across countries or involving currency conversion.
Each type triggers a specific rate and may include extra conversion or cross-border fees.
🧾 PayPal Fee Calculator
Try it yourself – enter your transaction amount, choose the type, and see your estimated payout.
💰 Standard PayPal Fees (U.S.)
| Transaction Type | Fee | Notes |
|---|---|---|
| Domestic sale | 2.99% | Applies to goods & services |
| International sale | 4.4% + fixed currency fee | Includes cross-border charge |
| Micropayments (< $10) | 5% + $0.05 | For small-value items |
| Donations | 1.99% + fixed fee | Applies to nonprofits |
| Friends & family (balance/bank) | Free | Credit/debit adds small fee |
| Refunds | No refund fee, but original fee not returned | Applies to sellers |
💱 Fixed Currency Fees
When you receive international payments, PayPal adds a fixed fee based on the currency:
| Currency | Fixed Fee |
|---|---|
| USD | $0.49 |
| EUR | €0.35 |
| GBP | £0.30 |
| CAD | $0.59 |
| AUD | $0.59 |
🔄 Currency Conversion Fees
If the transaction involves currency exchange, PayPal adds a 3–4% markup above the base exchange rate.
Example:
If 1 USD = 0.90 EUR on the market, PayPal might use 1 USD = 0.87 EUR — keeping the difference as a fee.
🧮 Example: Domestic vs International Sale
| Scenario | Amount | Fee Type | You Receive |
|---|---|---|---|
| U.S. sale | $100 | 2.99% = $2.99 | $97.01 |
| International sale | $100 | 4.4% + $0.49 = $4.89 | $95.11 |
| With currency conversion | $100 | +3% exchange loss | ~$92.26 |
🛰️ PayPal Fee Breakdown Infographic
Visual Summary: How PayPal Calculates Fees
- 🛒 Base Rate: % of the transaction
- 💲 Fixed Currency Fee: Based on payment currency
- 🔁 Exchange Markup: 3–4% for currency conversion
- 🧾 Total Fee Formula:
Fee = (Amount × Rate) + Fixed Fee (+ Conversion if applicable)
✅ Domestic example: $100 × 2.99% = $2.99
✅ International example: ($100 × 4.4%) + $0.49 = $4.89
✅ You Receive: $95.11