PayPal Fee Calculator – Reverse & Goods and Services Fee Tool
Calculate PayPal commercial transaction fees, payouts, and client invoices instantly.
A PayPal Fee Calculator determines the processing costs deducted from commercial transactions. The standard U.S. domestic rate for PayPal Digital Checkout is 3.49% + $0.49 per successful charge. This tool helps sellers calculate their net payout, or reverse-calculate the exact invoice amount needed to cover the fees.
Note: Invoicing and direct card payments may process at 2.99% + $0.49. Adjust above if necessary.
💡 Note on Accuracy: PayPal updates its fee structure frequently and uses different rates depending on how the customer pays. We built this PayPal Fee Calculator using the latest standard commercial rates published on the official PayPal Merchant Fees page. Always check your merchant dashboard for your specific account tier rates.
How PayPal Goods and Services Fees Actually Work
If you sell products online or freelance, PayPal is often the easiest way to get paid. Customers trust the brand, and checkout is seamless. But that convenience comes at a steep cost to you as the business owner.
PayPal’s fee structure is notoriously complex because it changes based on how the transaction is processed. If a customer pays you as a commercial transaction (known as “Goods and Services”), you will be hit with a blended rate: a percentage of the total, plus a fixed flat fee.
For U.S. Domestic Transactions, the standard rates are:
- PayPal Digital Checkout (Standard): 3.49% + $0.49
- Standard Credit/Debit Card Payments: 2.99% + $0.49
- Invoicing: 3.49% + $0.49
Because these rates are higher than many competitors, using a PayPal Fee Calculator is an absolute necessity before pricing your products. If you sell a $10 item, that $0.49 fixed fee instantly wipes out nearly 5% of your gross revenue before the percentage fee even kicks in.
Using a Reverse PayPal Fee Calculator (Gross Up Tool)
Here is a classic problem freelancers run into: You do a job for a client, and you agree your take-home pay should be exactly $1,000. You send a PayPal invoice for $1,000.
The client pays it, but when you look at your PayPal balance, you only have $964.61. PayPal kept $35.39 in fees. You are now short on your rent or project budget.
To avoid this, you need to use a Reverse PayPal Fee Calculator. This is sometimes called “grossing up” an invoice. Instead of guessing how much extra to charge, you calculate exactly what the gross invoice needs to be so that, after PayPal takes its 3.49% + $0.49 cut, you receive your target net amount.
The Reverse Calculation Math
You cannot simply add 3.49% to your invoice. If you add 3.49% to $1,000 (which is $1,034.90), PayPal will take their cut out of that higher number, and you will still be short.
The exact formula looks like this:
Invoice Amount = (Target Net + $0.49) / (1 – 0.0349)
If you use the tool at the top of this page and switch it to the “Reverse” tab, you will see that to receive exactly $1,000, you must send an invoice for $1,036.67.
The Hidden Costs: PayPal International and Currency Fees
If you thought the domestic fees were high, selling internationally through PayPal requires you to watch your margins like a hawk. When money crosses borders or changes currencies, PayPal acts as the bank, and they charge massive premiums for it.
If you have international clients, you must account for these two surcharges in our calculator:
1. The International Commercial Surcharge (+1.5%)
If you are a U.S. merchant and you receive a payment from an account outside the U.S. (even if they pay in US Dollars), PayPal adds a 1.5% cross-border fee. Your standard 3.49% rate just jumped to 4.99% + fixed fee.
2. The Currency Conversion Fee (+4.0%)
This is where PayPal makes a lot of its money. If a client in Europe pays you in Euros (€), and PayPal converts it into USD to deposit into your account, they charge a currency conversion spread. For commercial transactions, this is usually an agonizing 4.0% above the base exchange rate.
If a transaction triggers both the international fee and the currency conversion, you could be losing roughly 9% of your total invoice to processing costs.
| Transaction Type (U.S. Merchant) | Typical PayPal Fee Rate |
|---|---|
| U.S. Customer (USD) | 3.49% + $0.49 |
| UK Customer (pays in USD) | 4.99% + $0.49 |
| UK Customer (pays in GBP) | ~8.99% + fixed fee (includes conversion) |
Step-by-Step PayPal Fee Examples
Let’s look at how these numbers play out on two very different types of transactions.
Example A: Selling a Small Digital Product
You sell a custom spreadsheet template for $15.00 via standard PayPal checkout.
- Percentage Fee: $15.00 × 0.0349 = $0.52
- Fixed Fee: $0.49
- Total PayPal Fee: $0.52 + $0.49 = $1.01
- Your Net Payout: $15.00 – $1.01 = $13.99
Here, your effective fee rate is a painful 6.7% because the fixed $0.49 fee makes up such a large portion of a small ticket item.
Example B: Invoicing a Large Project
You invoice a client for $2,500 for a marketing campaign.
- Percentage Fee: $2,500 × 0.0349 = $87.25
- Fixed Fee: $0.49
- Total PayPal Fee: $87.25 + $0.49 = $87.74
- Your Net Payout: $2,500 – $87.74 = $2,412.26
Losing nearly $90 on a single transaction is why many freelancers ask high-ticket clients to pay via bank transfer instead.
PayPal vs. Stripe: Which is Cheaper?
This is the most common question online sellers ask. The answer comes down to your transaction type.
Currently, Stripe’s standard U.S. domestic rate is 2.9% + $0.30. PayPal’s standard commercial rate is 3.49% + $0.49. In almost every domestic scenario, Stripe is mathematically cheaper for the merchant. However, PayPal boasts higher conversion rates for e-commerce stores because customers can check out in one click without hunting for their credit card.
If you want to run your exact numbers to see the difference, open our Stripe Fee Calculator in a new tab and compare the net payouts directly.
Tax Deductions: Are PayPal Fees a Write-Off?
If you are sick to your stomach looking at how much you pay in processing fees, here is the silver lining: PayPal fees are 100% tax-deductible as a business expense.
According to the IRS, merchant processing costs are a necessary cost of doing business. If you are a freelancer, sole proprietor, or LLC, you will list these total fees on your Schedule C at tax time. Doing so lowers your taxable net income, which reduces both your income tax and your self-employment tax.
Typically, PayPal will send you a Form 1099-K at the end of the year summarizing your gross sales. You must report this gross number to the IRS, and then manually deduct the fees. If you are trying to estimate your quarterly estimated taxes or figure out your end-of-year burden, plug your numbers into our 1099 Tax Calculator or our Freelance Tax Calculator.
How to Avoid or Lower PayPal Fees
You probably can’t escape PayPal entirely, but you can optimize how you use it to protect your margins.
1. Never Use “Friends and Family” for Business
It is tempting to ask clients to send money via the “Friends and Family” option because it charges zero fees. Do not do this. It violates PayPal’s Terms of Service. If they catch you using personal transfers for commercial goods, they can permanently ban your account and hold your funds for 180 days. Furthermore, your buyer loses all purchase protection.
2. Use PayPal Micropayments for Small Items
If you sell low-cost items (usually under $10), the standard $0.49 fixed fee will destroy your profits. PayPal offers a special “Micropayments” tier you can apply for. The rate is typically 5.0% + $0.05. The percentage is higher, but the much lower fixed fee saves you massive amounts of money on cheap items.
3. Bill Large Invoices via ACH/Bank Transfer
If you are billing a client $5,000, do not let them pay with a credit card via PayPal. Ask them to pay via direct bank transfer, ACH, or check. While PayPal does offer some bank transfer options, moving large B2B payments off the platform entirely is the best way to keep that $150+ fee in your own pocket.