PayPal Fee Calculator

The maths behind it

PayPal's commercial transaction pricing is a percentage plus a fixed amount, with the percentage varying by transaction type and the sender's country. Fee = amount × rate + fixed, net = amount − fee.

The fixed amount is set in the currency received, so a business receiving in several currencies faces several different fixed components rather than one converted figure.

In practice

A $58 domestic goods-and-services payment at 3.49% + $0.49: $2.02 plus $0.49 is $2.51, and $55.49 arrives. The effective rate is 4.33%.

The same order paid with an international card adds a cross-border fee, commonly around 1.5%, taking the total to $3.38 and the effective rate to 5.83%.

Against Stripe's $1.98 on the same domestic order, PayPal costs $0.53 more. On 15,000 orders that is $7,950 a year, which is the kind of gap worth knowing before choosing a default checkout.

The limitations

PayPal's rate card has more variants than most: standard checkout, advanced checkout, invoicing, micropayments, charity rates and QR code payments all price differently, and the applicable one depends on how the payment was initiated rather than what was sold.

Currency conversion is charged separately and is applied to the exchange rate rather than shown as a fee. A business receiving in a foreign currency and converting pays a spread that does not appear on the transaction as a line item.

Putting it to use

Check which rate actually applied on a sample of real transactions rather than assuming the headline. The gap between the rate a business believes it pays and the rate its statement shows is routinely half a point or more.

Then consider the micropayments rate if a substantial share of transactions are small. It trades a higher percentage for a much lower fixed fee and wins below roughly $10 per transaction.

Why PayPal costs more and is often still worth it

PayPal is consistently more expensive per transaction than a card-only processor, and the argument for it has never been price. It is conversion: a meaningful share of buyers will complete a PayPal checkout and abandon a card form, particularly on mobile and particularly with an unfamiliar merchant.

The calculation that matters is therefore incremental. If offering PayPal costs $0.53 more on the orders that would have converted anyway, but converts additional orders that would otherwise have been lost, the question is what share of PayPal orders are incremental.

That is measurable, remove it from a subset of traffic and compare total conversion, not PayPal's share, and the answer varies enormously by audience. For most consumer stores the incremental conversion covers the fee difference several times over; for a B2B store with repeat customers it frequently does not.

One further variant worth checking: PayPal's rates for registered charities and for micropayments are both materially different from the standard commercial rate, and neither is applied automatically, each requires an application or a specific account configuration.

A business whose average transaction sits under about $10 and which has never applied for micropayments pricing is paying substantially more than it needs to, and the application is short.