PayPal Fees 2026: Business, Invoicing and G&S Rates (US)
PayPal fees for US businesses at the time of writing (October 2026): checkout, invoicing, cards, goods and services, international, conversion and payout costs.
PayPal fees for US businesses, at the time of writing (October 2026), are 3.49% plus $0.49 for PayPal Checkout payments, 2.99% plus $0.49 for standard card payments, and 2.99% for goods and services payments. Invoices paid by bank (ACH) cost 1% capped at $10, and international payments add 1.50%. Standard withdrawals are free.
Those headline rates hide a lot of variation. The fee depends on how the customer pays, where they are, whether currency is converted, and how you withdraw. This guide pulls the main PayPal business fees for 2026 into one place, using PayPal's US merchant fee page (last updated October 1, 2026), and shows what they mean on real invoices. PayPal changes its fees from time to time, so confirm on its official fee page before quoting prices.
PayPal fees for business: the core rates
| How the customer pays | Rate | Fixed fee (USD) |
|---|---|---|
| PayPal Checkout (PayPal account) | 3.49% | $0.49 |
| PayPal Guest Checkout | 3.49% | $0.49 |
| Pay with Venmo | 3.49% | $0.49 |
| Pay Later | 4.99% | $0.49 |
| Standard credit and debit card payments | 2.99% | $0.49 |
| Advanced credit and debit card payments | 2.89% | $0.29 |
| QR code payments | 2.29% | $0.09 |
| Send/receive money for goods and services | 2.99% | See PayPal's page |
| International commercial transactions | Add 1.50% | Same fixed fee |
Source: PayPal US merchant fees at the time of writing. The advanced card rate applies to the Advanced Credit and Debit Card Payments product; PayPal also lists an interchange-plus-plus option for that product. If you are unsure what interchange-based pricing means, read our guide on merchant account vs payment processor.
In-person and nonprofit rates
PayPal business fees in 2026 also cover in-person and charitable payments. At the time of writing, PayPal's US page lists card-present transactions through its point-of-sale products at 2.29% plus $0.09, manually keyed cards at 3.49% plus $0.09, and QR code payments at 2.29% plus $0.09. Eligible confirmed charities can receive a discounted rate of 1.99% plus the fixed fee after approval, and donations through the standard donate tools are listed at 2.89% plus the fixed fee. International donations add 1.50%.
If you sell at events, markets or client sites, compare these rates with the online ones. In-person card payments are generally cheaper per transaction than branded online checkout.
PayPal invoicing fees
Creating and sending a PayPal invoice is free. You pay when the customer pays, and the rate depends on the payment method they choose on the invoice page:
- PayPal Checkout, Venmo or Guest Checkout: 3.49% plus the fixed fee.
- Card, Apple Pay or other third-party wallets: 2.99% plus the fixed fee.
- Pay Later: 4.99% plus the fixed fee.
- Pay by Bank (ACH): 1%, capped at $10.00 per transaction.
- International payer: add 1.50%.
That ACH cap makes a big difference on larger invoices. Steering business clients towards paying by bank is the easiest way to cut PayPal invoicing fees. Our step-by-step guide on how to send a PayPal invoice covers the setup, and our guide to accepting ACH payments covers bank-based alternatives.
Worked examples: what you actually receive
Example 1: $1,500 invoice paid via PayPal Checkout (domestic)
3.49% of $1,500 is $52.35, plus $0.49, for a fee of $52.84. You receive $1,447.16.
Example 2: the same invoice paid by card
2.99% of $1,500 is $44.85, plus $0.49, for a fee of $45.34. You receive $1,454.66.
Example 3: the same invoice paid by Pay by Bank (ACH)
1% of $1,500 is $15.00, but the fee is capped at $10.00. You receive $1,490.00.
Example 4: the same invoice paid via PayPal Checkout by a client in Canada
3.49% plus 1.50% is 4.99%. 4.99% of $1,500 is $74.85, plus $0.49, for a fee of $75.34. If the payment also needs a currency conversion, a spread applies on top. You receive $1,424.66 before any conversion.
The gap between the cheapest and most expensive option on one $1,500 invoice is over $65. Across a year of invoices, payment method choice is worth managing.
PayPal fees by invoice size
Because most PayPal fees are a percentage plus a fixed fee, the fixed part matters on small payments and the percentage matters on large ones. The table below applies the published US rates at the time of writing to domestic invoices.
| Invoice amount | PayPal Checkout (3.49% + $0.49) | Card (2.99% + $0.49) | Pay by Bank (1%, cap $10) |
|---|---|---|---|
| $50 | $2.24 | $1.99 | $0.50 |
| $250 | $9.22 | $7.97 | $2.50 |
| $1,000 | $35.39 | $30.39 | $10.00 |
| $5,000 | $174.99 | $149.99 | $10.00 |
On a $5,000 invoice, the difference between PayPal Checkout and Pay by Bank is about $165. On a $50 invoice, it is under $2. That is why it makes sense to push bank payment for larger invoices while accepting any method for small ones.
The goods and services fee explained
When a client pays you through PayPal's send money feature and selects goods and services, it is a commercial transaction. The goods and services fee listed on PayPal's US page at the time of writing is 2.99%. That fee buys purchase protection for eligible buyers and potential seller protection for eligible sellers.
Some freelancers ask clients to use friends and family to avoid the fee. Do not do this for business payments. It breaches PayPal's user agreement, removes protection for both sides, and can lead to account limitations. It also makes your records messier at tax time. Include PayPal fees in your pricing instead.
International and currency conversion fees
Two separate costs apply to overseas payments:
- International fee: an extra 1.50% on commercial transactions from international payers. PayPal's interchange-plus-plus card option is listed without this extra fee.
- Currency conversion spread: 4.00% when paying for goods or services in another currency or sending money so the recipient receives a different currency, and 3.00% for all other conversions, such as converting a balance.
Here is how it adds up. A client in the UK pays a $2,000 invoice through PayPal Checkout. The transaction fee is 3.49% plus 1.50%, or 4.99%, which is $99.80, plus $0.49, for $100.29. If you then convert the remaining balance to another currency at a 3.00% spread, you lose roughly another $57.
Combined, an international payment that also needs conversion can lose 7% or more. For clients abroad, compare PayPal with multi-currency accounts; see Wise vs PayPal, Payoneer vs PayPal and our guide to cross-border payment fees.
Withdrawals, refunds, chargebacks and disputes
| Item | Fee at the time of writing |
|---|---|
| Standard transfer to bank (no conversion) | Free |
| Instant transfer to bank | 1.50%, minimum $0.50, up to $25,000 per transaction |
| Refund of a commercial transaction | No refund fee, but the original fees are not returned |
| Chargeback (USD) | $20.00 |
| Dispute (USD) | $15.00 standard, $30.00 high volume |
The refund rule catches many sellers out. If you refund a $500 card payment, you still lose the original $15.44 fee (2.99% plus $0.49). A strong refund and dispute process matters; see our guide on how to handle chargebacks.
PayPal vs other processors
When comparing, look at the method your clients actually use rather than the lowest rate on each provider's page. If most clients pay with a PayPal account, PayPal's checkout rate is the number that matters. If most pay by card through a payment link, compare card rates. If clients are businesses happy to pay by bank, compare capped ACH pricing. A provider that looks cheaper on cards can be more expensive overall if your clients prefer to pay with their PayPal balance and you lose sales by removing that option.
PayPal's strength is customer trust and the large number of buyers who already have PayPal or Venmo accounts. Its weakness is cost on branded checkout payments and international transactions. For card-heavy businesses, compare with Stripe and Square: our Stripe vs PayPal comparison and Square invoice fees guide set out the differences. Many small businesses offer PayPal alongside a bank transfer option rather than relying on it alone.
How to reduce PayPal fees
- Offer Pay by Bank on invoices and explain to clients that it is the preferred method for larger amounts.
- List direct bank transfer details on your invoice as an alternative for regular clients.
- Use standard transfers to your bank instead of instant transfers.
- Hold currency balances instead of auto-converting, and convert in larger, planned amounts.
- Price fees in. If you cannot avoid them, include an allowance in your rates rather than adding surcharges, which are restricted by card network rules and some state laws. See our guide to credit card surcharge rules.
- Review your monthly statement and divide total fees by total received to see your real effective rate.
Is PayPal worth the fees?
For many freelancers and small businesses, yes, as one option among several. PayPal fees are higher than a direct bank transfer, but you get things a bank transfer does not offer: a payment page clients already trust, the ability for clients to pay with a PayPal balance, Venmo, card or Pay Later, quick notifications when a payment lands, and potential seller protection on eligible transactions. Clients who would delay paying by wire will often pay a PayPal invoice the same day.
PayPal is less attractive when invoices are large, when most clients are businesses with accounts payable teams that pay by bank anyway, or when most payments are international and need conversion. In those cases, list bank details first and keep PayPal as a convenience option.
A simple policy that works for many small businesses:
- Under a few hundred dollars: accept any PayPal method; the fee difference is small.
- Larger domestic invoices: encourage Pay by Bank or direct ACH.
- International invoices: offer a multi-currency account or bank transfer and keep PayPal for clients who insist.
Whatever you choose, write the accepted payment methods into your terms and on every invoice, so clients know before they pay which options are available and which one you prefer for larger amounts.
Tax and record-keeping
Download your PayPal activity report monthly and reconcile it against your invoices. Matching each payment to an invoice number shows you which clients paid, which paid short because of fees, and which payments were refunded or disputed. PayPal fees are generally deductible business expenses, so record the gross amount, the fee and the net payout for each invoice. PayPal may issue Form 1099-K if you meet the federal reporting threshold; see our 1099-K threshold guide for the current rule. Report all business income whether or not you receive a form, and check with a qualified tax adviser for your situation.
Conclusion
PayPal fees range from a capped 1% for bank payments to almost 5% or more on international checkout payments, before conversion. Know which rate applies to each payment method, push larger invoices towards bank payments, and check PayPal's official fee page for changes. To issue your own branded invoice with payment instructions and a PayPal link in the notes, use the free invoice generator; it creates the PDF, and PayPal handles the payment.
Frequently asked questions
How much does PayPal charge a business per transaction?
At the time of writing (October 2026), PayPal's US merchant fee page lists 3.49% plus a fixed fee for payments made through PayPal Checkout, Venmo or Guest Checkout, and 2.99% plus a fixed fee for standard credit and debit card payments. The fixed fee for US dollar payments is $0.49. International payments add 1.50%. Pay Later options cost 4.99% plus the fixed fee. Rates differ by product and country, so check PayPal's current fee page for your account.
What are PayPal invoicing fees?
PayPal does not charge to create or send an invoice. You pay when the invoice is paid. At the time of writing, invoices paid with PayPal Checkout, Venmo or Guest Checkout cost 3.49% plus the fixed fee, invoices paid by card or Apple Pay cost 2.99% plus the fixed fee, Pay Later costs 4.99% plus the fixed fee, and Pay by Bank (ACH) costs 1% capped at $10.00. International invoice payments add 1.50%.
What is the PayPal goods and services fee?
When someone sends you money using the goods and services option, rather than friends and family, it counts as a commercial transaction and you pay a fee. PayPal's US fee page lists 2.99% for send and receive money for goods and services at the time of writing. In exchange, eligible buyers get purchase protection and eligible sellers may get seller protection. Using friends and family for business payments to avoid the fee breaks PayPal's rules and removes those protections.
Does PayPal refund fees when I refund a customer?
No. According to PayPal's US merchant fee page at the time of writing, there is no fee to refund a commercial transaction, but the fees you originally paid to receive the payment are not returned, whether you refund in full or in part. So a refunded $100 sale still costs you the original fee. Factor this into your refund policy, and consider partial refunds or store credit where appropriate.
How much does it cost to withdraw money from PayPal?
A standard transfer to your linked bank account is free when no currency conversion is involved, per PayPal's US fee page at the time of writing. An instant transfer costs 1.50% of the amount, with a minimum fee of $0.50, and is limited to $25,000 per transaction. If you can wait a business day or so, the standard transfer avoids the fee entirely.
How much is PayPal's currency conversion fee?
PayPal applies a spread to its base exchange rate when it converts currency. At the time of writing, its US fee page lists 4.00% for paying for goods or services in another currency, or sending money so the recipient gets a different currency, and 3.00% for other conversions. On a $2,000 payment converted at 3.00%, that is roughly $60 lost to conversion on top of the transaction fee.
How do I avoid PayPal fees?
You cannot avoid fees on legitimate business payments, but you can reduce them. Encourage clients to pay invoices by Pay by Bank, which is capped at $10 per transaction at the time of writing. Offer direct bank transfer as an alternative for large invoices. Use standard rather than instant withdrawals. Hold foreign currency balances instead of converting every payment. And compare PayPal's rates with other processors if most of your clients pay by card.
What are PayPal chargeback and dispute fees?
At the time of writing, PayPal's US fee page lists a $20.00 chargeback fee and a dispute fee of $15.00 at the standard rate or $30.00 for high-volume sellers. These apply on top of the original transaction fee, which is not refunded. Clear item descriptions, prompt delivery, tracking and good communication reduce disputes. Our guide to handling chargebacks covers how to respond if one is raised.
Does PayPal report my income to the IRS?
PayPal, as a payment settlement entity, files Form 1099-K for sellers who meet the federal reporting threshold for goods and services payments. The threshold has changed several times in recent years, so check our 1099-K threshold guide and the IRS for the current figure. Whether or not you receive a form, business income is taxable and must be reported. Personal friends and family payments are not reportable as business income unless they really are business payments.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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