PayPal Fee Calculator

Complete Guide to PayPal Fees for US Freelancers (2026 Update)

As a freelancer or small business owner in the United States, understanding PayPal fees is crucial for maintaining healthy profit margins. Every transaction fee cuts into your earnings, and without proper planning, these costs can significantly impact your bottom line. This comprehensive guide breaks down everything you need to know about PayPal fees in 2026 and how to minimize their impact on your business.

Domestic vs. International PayPal Fees

PayPal charges different rates depending on whether you're receiving payments from US-based clients or international customers:

• Domestic Transactions (US to US): 2.9% + $0.30 per transaction. This is the standard rate for receiving payments from US PayPal accounts for goods and services.
• International Transactions: 4.4% + $0.30 per transaction. When receiving payments from clients outside the United States, PayPal charges a higher percentage fee to cover currency conversion and cross-border processing.

For example, on a $1,000 domestic payment, you'll pay $29.30 in fees and receive $970.70. The same amount from an international client would cost $44.30 in fees, leaving you with $955.70.

How the Reverse Calculator Works

One of the most valuable features of our PayPal fee calculator is the reverse calculation function. Instead of calculating fees after receiving a payment, you can determine exactly how much to invoice your clients to receive your desired amount after fees.

For instance, if you need to receive exactly $500 for a project, simply enter $500 in reverse mode, and the calculator will show you need to request $515.15 (for domestic) or $522.37 (for international) to account for PayPal's fees. This ensures you never lose money on transaction costs and can accurately quote clients.

Tips to Lower PayPal Fees

While you can't eliminate PayPal fees entirely, these strategies can help reduce your costs:

• Pass Fees to Clients: Many freelancers add a service fee or invoice for the exact amount needed after fees using the reverse calculator.
• Use PayPal Friends & Family for Personal Transactions: For non-business transfers (like reimbursements or gifts), Friends & Family payments have no fees. However, this option removes buyer protection and should never be used for commercial transactions.
• Consider Alternative Payment Methods: For large invoices, bank transfers (ACH) or services like Wise (formerly TransferWise) may offer lower fees, especially for international payments.
• Negotiate for Larger Projects: Some clients are willing to cover PayPal fees as part of the project budget. Don't hesitate to discuss this, especially for high-value contracts.

Frequently Asked Questions

Does the sender or receiver pay the PayPal fee?

By default, the receiver (seller or service provider) pays the PayPal fee. When someone sends you $100 for goods or services, PayPal deducts their fee before depositing the funds into your account. However, some senders choose to cover the fee themselves by sending extra money, or you can invoice for a higher amount using our reverse calculator.

Are PayPal fees tax deductible?

Yes, PayPal fees are generally tax deductible as a business expense for US freelancers and self-employed individuals. You can report these fees on Schedule C (Form 1040) under "Other Expenses" or "Bank Fees and Merchant Services." Keep detailed records of all your PayPal transactions and fees throughout the year. Consult with a tax professional for specific advice based on your situation.