PayPal is the main payment platform of many businesses and organizations. It’s convenient, but one concern is its costs.
Using PayPal isn’t always free. Businesses that use PayPal to receive payments have to remit a fixed fee and a percentage of the funds from their sales. In the United States, companies pay a fixed rate of 45 cents and a commercial fee of 3.49% of their transaction amount.
Many people have asked if it is possible to lower PayPal fees or even avoid them. If you have these questions on your mind, these tips will help you.
- Choose fewer payments over frequent ones
One downside to receiving frequent payments is that PayPal will charge you for every transaction alongside the charge on a percentage of the money you receive. While businesses within the U.S pay a transaction fee of $0.49, and 3.49% of the amount received from clients within the U.S, the charge for each transaction becomes 4.99%, alongside a fixed fee that depends on the client’s country.
To avoid transaction fees each time you get paid, you can choose to get paid monthly. On tools.joinflyp.com you can check the exact PayPal fees you should pay.
- Change your PayPal withdrawal method
You can avoid PayPal fees, and get your money faster by either requesting a PayPal cash card or transferring the money you’re paid to your bank account.
- Designate clients as Family or Friend
PayPal only imposes its charges when you receive money for goods or services. So, if your client sends you money using the family and friends option, you won’t need to pay those fees. The sender also won’t be charged according to this system.
If your client uses a credit or debit card to send the money to you, they’ll then have to pay fees based on their location.
- Always consider PayPal Fees when selling your goods/service
Factoring the PayPal fee into your payment equation by increasing the rate slightly will help you meet up with the fees and enjoy a good profit even after charges.
You can also ask your clients to settle your PayPal charges as a part of your business agreement.
- Add PayPal Fees as a Tax Deduction
You can choose to deduct PayPal fees on your tax return to help your lower your tax bill during the year. You’ll still have to settle all PayPal charges though.
How to Calculate PayPal Fees
As stated earlier, PayPal charges 3.49% of the total amount you receive as payment within the U.S, alongside a $0.49 flat fee for every transaction you make.
When receiving payments from other countries apart from the U.S., the charge increases to 4.99% of the received amount plus a stipulated flat fee, depending on the country you’re receiving from.
The receiver pays the charge and not the sender, just as a store will pay a transaction fee when you make credit card payments.
PayPal Fee Calculator
If you’re not sure how much you’ll be paying as charges when you receive funds via PayPal? This PayPal fee calculator will tell you!
