PayPal Invoice: How to Send One and What It Costs

Quick answer: To send a PayPal invoice, log in to a PayPal business account, open the invoicing section, add your client's email, enter line items, tax and a due date, then click send. PayPal emails the client a link to pay by PayPal, card or bank. Sending is free; you pay a fee only when the invoice is paid, and US rates currently start at 1% for bank payments.

A PayPal invoice is convenient when your client already uses PayPal or wants to pay by card. It is less convenient when their accounts team wants a formal invoice with your tax ID, PO number and detailed terms. This guide covers how to send an invoice on PayPal, what the fees look like on a real job, and when to pair it with your own PDF built in our free invoice generator.

How to send an invoice on PayPal, step by step

PayPal moves its menus around from time to time, so the labels below may differ slightly in your account. The steps themselves have stayed the same for years.

1. Use a business account. Invoicing works best from a PayPal business account. Upgrading a personal account is free, and it keeps business income separate from money friends send you.
2. Open invoicing. In the web dashboard, look under the payments or "Pay & Get Paid" menu for Invoices, then choose Create invoice. The PayPal Business mobile app has the same option.
3. Set up your business details once. Add your business name, logo, address, phone and any tax ID you want shown. These carry over to every future invoice.
4. Add the customer. Enter the client's email address. Add their billing address if they need it on the invoice for their records.
5. Enter line items. Describe each service or product, the quantity or hours, and the unit price. Add sales tax per line if you collect it.
6. Set the invoice number, date and due date. PayPal suggests the next number automatically; change it if you run your own sequence.
7. Add notes, terms and attachments. This is where you can attach a contract, a timesheet or your own invoice PDF.
8. Choose payment options. Depending on your account, you may be able to allow partial payments, tips or bank payments.
9. Preview, then send. PayPal emails the invoice with a payment button. You can also copy a shareable link and send it through any channel.

After you send it, the invoice shows as unpaid until the client pays. You can send reminders from the same screen, record a payment received outside PayPal (for example a paper check), or cancel the invoice if the job changes.

PayPal invoice fees in the US (2026)

Sending a PayPal invoice is free. The fee comes out of the payment when the client pays. Here are the US rates for invoice payments listed on PayPal's official business fees page, which was last updated on 1 October 2026 when we checked it.

How the client pays	US fee per invoice payment
PayPal checkout, Pay with Venmo or guest checkout	3.49% + $0.49
Credit or debit card, Apple Pay or other wallets	2.99% + $0.49
PayPal Pay Later	4.99% + $0.49
Pay by Bank (ACH)	1%, capped at $10.00
International payment (payer outside the US)	Add 1.50% to the domestic rate

The fixed fee of $0.49 applies to US dollar payments. If you receive another currency, PayPal applies a different fixed fee for that currency, and converting the money adds a currency conversion charge. Fees also vary by country: a seller in the UK, Canada or Australia pays a different schedule from a US seller. Always check the fee page for the country where your PayPal account is registered.

Worked example: what a $1,000 PayPal invoice actually pays you

Say you invoice a client $1,000.00 for a website audit. Here is what lands in your PayPal balance depending on how they pay, using the US rates above.

Payment method	Fee calculation	Fee	You receive
Pay by Bank	1% of $1,000 = $10.00 (at the cap)	$10.00	$990.00
Card	2.99% of $1,000 = $29.90, + $0.49	$30.39	$969.61
PayPal balance (US client)	3.49% of $1,000 = $34.90, + $0.49	$35.39	$964.61
PayPal balance (client in Canada)	(3.49% + 1.50%) of $1,000 = $49.90, + $0.49	$50.39	$949.61
Pay Later	4.99% of $1,000 = $49.90, + $0.49	$50.39	$949.61

The gap between the cheapest and most expensive option is $40.39 on a single $1,000 invoice. On larger invoices the bank option gets even better because of the $10 cap: a $5,000 invoice paid by bank still costs $10, while the same invoice paid by PayPal balance costs $174.99 (3.49% of $5,000 is $174.50, plus $0.49).

That is why many freelancers put bank transfer details on the same invoice. Our guide to ACH vs wire transfer explains the cheaper bank routes, and bank details on an invoice shows what to print so the client can pay you directly.

When to attach your own PDF invoice

PayPal's invoice form covers the basics: your details, the client, line items, tax, a total and a due date. For many small jobs that is all you need. There are good reasons to send a proper invoice PDF alongside it, though:

• The client has an accounts payable team. Larger companies often need a PO number, a supplier number, your legal entity name and remittance details in specific places. A PDF you control makes that easy.
• You need tax details shown a certain way. VAT or GST invoices outside the US have required fields, and some clients want your EIN or state tax ID on the face of the invoice. See our guide to tax IDs on invoices.
• You bill detailed hours or milestones. A timesheet-style breakdown reads better on a full invoice than in a short PayPal line.
• You offer more than one payment method. Your PDF can list PayPal, bank transfer and card, letting the client pick the cheapest one for you.
• You want consistent records. If only some clients pay through PayPal, keeping every invoice in one format and one numbering sequence makes tax time easier.

A simple workflow: create the invoice in the invoice generator, download the PDF, then create a PayPal invoice for the same amount with the same invoice number and attach the PDF. Or skip the PayPal invoice entirely and paste a PayPal payment link into your PDF. Our article on adding a payment link to an invoice walks through that option.

PayPal invoice vs a payment link vs a PayPal.Me request

PayPal gives you several ways to ask for money, and they are not interchangeable.

• PayPal invoice: itemized, numbered, tracked as paid or unpaid, with reminders. Best for client work.
• Payment link or button: a fixed amount or product your customer pays through a link. Useful for repeat products or deposits, and easy to paste into an invoice you made elsewhere.
• PayPal.Me link: a personal link where the payer types an amount. Quick, but there are no line items, and it is easy for payments to come in with the wrong amount or no reference.

For business income, an invoice or a payment link tied to an invoice number is far easier to reconcile than loose PayPal.Me payments.

Tips to get paid faster through PayPal

• Use a real due date such as "Due 15 November 2026", not just "Net 30". Our guide to invoice payment terms explains why.
• Schedule reminders. PayPal can send reminders before and after the due date. Combine that with a short personal email for larger invoices.
• Keep invoice numbers consistent. If you invoice outside PayPal too, use one sequence. The invoice number generator can create a format such as INV-2026-041.
• Record off-PayPal payments. If the client pays by bank transfer instead, mark the PayPal invoice as paid so your records match.
• Watch for fake PayPal invoices. Scammers send convincing fake invoices through PayPal itself. If you are on the receiving end, read our guide to invoice scams before paying anything unexpected.

PayPal invoices and taxes

PayPal may send you a Form 1099-K in the US if your payments for goods and services cross the federal reporting threshold, and some states use lower thresholds. Every dollar of business income is taxable whether or not you receive a form. Our post on the 1099-K threshold explains the current rules. Keep your PayPal fees too: they are a business expense, and you should record the gross invoice amount as income and the fee separately, not just the net deposit.

Rules and rates change, and this is general information rather than tax advice. Confirm your situation with a tax professional.

Next step

Before your next PayPal invoice, build a matching PDF in the free invoice generator with your tax ID, terms and both a PayPal link and bank details. Your client can pick how to pay, and you keep a clean, numbered record of every job.