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How Much Are PayPal Fees for Businesses and Merchants?

Written by, Alex Bosnjak

Updated June, 5, 2022

PayPal currently has 361 million active users, and on average one conducts 40 transactions per year. There’s just no substitute for the service when it comes to ease of use and convenience. It’s ideal for commercial transactions. 

The community of online buyers and sellers that utilizes PayPal depends on ensuring a secure online payment using the customer’s credit card or bank account. 

But when you go into your PayPal account, you’re confronted with a considerable obstacle: fees. 

So, how much are PayPal fees? It’s crucial to know if you make significant sales. Continue reading as I take a more in-depth look at how PayPal and its fee schedule operate.

What Is PayPal?

Initially established by Max Levchin, Luke Nosek, and Peter Thiel in December 1998, PayPal is a corporation specializing in payment processing services. It enables financial transactions between parties using the internet. 

In layman’s terms, it’s a system that allows safe and secure online purchasing of goods and services and the sending and receiving of monetary transactions.

What Is the PayPal Fee?

The costs PayPal charges differ depending on whether the transaction is local or international, the kind of payment made, the currency received, the payment method, and whether the customer or the merchant pays the fees. 

PayPal is free to use for any transaction that doesn’t include currency conversion and takes place either online or in a physical shop.

But the service imposes fees on commercial transactions for merchants that consist of a percentage varying from 1.9% to 3.49%. There’s also a flat cost for each transaction that looks like x.x% plus a predetermined cost equals the total fee you must pay. 

The flat cost is the same for domestic and foreign transactions; however, the transaction percentage is somewhat more significant for overseas payments. 

Imagine that your commercial transaction in Australia is $1,000 (a lovely round amount that makes calculations easier). If you look at the table on PayPal’s website for its various nations and regions, you’ll see that you must pay a transaction charge of 2.60% + a fixed fee.

PayPal’s charge schedules for consumers and eCommerce small businesses are regularly updated here. Try using a PayPal fee calculator for a speedier method of determining the fees.

Find eCommerce store builders here.

Types of Paypal Transaction Fees in Australia

Over 7 million people in Australia choose PayPal for online transactions. Even if there are legitimate alternatives, most people still prefer to use this service because of its convenience, reputation, and security. 

But the fees are one area that doesn’t score very well. PayPal charges are among the highest in the business, particularly for international transactions.

Domestic Fees

When PayPal recognizes the sender and the recipient as inhabitants of the same market, 2.9% of the money the user receives and a set cost of thirty cents (or the “fixed fee” that corresponds to the currency PayPal provides if the country is outside the US) is charged in the name of the domestic fee. 

International Fees

Whenever a user gives PayPal permission to convert a currency into US dollars during an international transaction, the user is subjected to foreign transaction fees. 

PayPal converts the customer’s money into the target currency and then charges the user an additional 3–4% of the total transaction amount as a fee.

Exchange Fees

Suppose the sender has to change the currency before transferring the money. 

In that case, the PayPal cost is 3.5% to convert to US or Canadian dollars. In contrast, the conversion fee for all other currencies, including the Australian dollar (AUD), is 4%.

Note that the types of PayPal fees don’t end here. We’ll cover the rest in the section below.

How Much Are Paypal Fees?

In this age of unparalleled globalization, it’s now simpler for companies to interact with clients, consumers, and partners in other countries. The introduction and widespread use of services to send and receive money, such as PayPal, has been among the recent trends. 

Compared to more conventional bank wire transfers, PayPal provides companies with an alternative that’s less expensive, more reasonable, and simpler to use when making international payments to business partners. 

The issue that everyone is thinking about, though, is whether or not there’s a catch. Let’s walk through all the questions you may have concerning PayPal fees.

Paypal Fees for Businesses 

There are three types of fees you should know about:

  • Domestic Fees
  • International Fees
  • Exchange Fees

Withdrawal Fees

Generally, PayPal doesn’t have a withdrawal fee. But if a user attempts to withdraw/transfer money out of their account, and the transaction is unsuccessful due to incorrect bank account details or delivery information, the user will be subject to this fee. 

As far as withdrawal limits go, the least amount that may be transferred from a standard PayPal account is $0.01, and the maximum you can send is $4,000. You can also take out a maximum of $500 from your bank account each month.

Paypal Here Card Reader

Using PayPal Here doesn’t include any recurring costs or contractual obligations. After making a one-time investment in the card reader, you’ll pay for each transaction on a transaction-by-transaction basis

The transaction fees for Chip & PIN and contactless payments begin at 2.75% and may reduce to as low as 1%, depending on the total sales volume handled via PayPal by your business.

Refund Fees

When you submit a refund using PayPal, you won’t be subject to additional costs. But the service will refund none of the expenses you paid to process the original transaction. 

PayPal used to repay a portion of the processing costs for refunded transactions, but in 2019, the company modified its policy.

Ways to Save as a Freelancer

There has been a recent uptick in the prevalence of remote work, and freelancing is shaping up to be the flexible talent-sourcing solution in the ever-evolving desire to stay competitive. 

With just one goal to get paid, a whopping 1 million freelancers trust PayPal as a payment gateway. 

Here’s how to save as a freelancer using the service. 

Merchant Rates

Unlike traditional merchant account providers with complex qualifying requirements and mountains of paperwork, PayPal requires nothing more than basic contact information. 

There’s no need for a credit check, so anybody may join up. You, being a freelancer, can get started in seconds and save in the long run with minimal standard rates.

Less Monthly Payments

PayPal’s basic account comes with no maintenance fees. So, there’s no fee to sign up and access the merchant services. Also, there are no expenses associated with the service setup or cancellation. With fewer monthly payments, you’ll save more time and money.


With this approach, transactions of less than $10 have a more advantageous fee structure. Although the fee is more significant (5% domestic or 6.5% international), the fixed fee is comparatively lower. While the savings aren’t huge, they might build up over time if you add all the low-value sales transactions.

Selecting the Standard Transfer

The standard transfer is the best option for freelancers since it’s free, but it may take up to one business day. 

It’s the quicker and simpler method if you don’t want extensive programming involved, and it allows your clients to send money without a PayPal account, which is quite convenient.

Sell Products in Your Currency

The PayPal currency cost is 3.5% to convert to US or Canadian dollars. In contrast, the same fee for all other currencies, including the Australian dollar (AUD), is 4%. 

To avoid exchange and conversion fees, sell products or services in your currency.


So, how much are PayPal Fees? It depends on many aspects, but they remain some of the highest in the industry.

Whether you’re a freelancer, general consumer, online shop owner, or eCommerce shop owner, before you sign up for a PayPal account, you need to understand the fees involved. 

Now that you know more about the fee structure in Australia and globally, don’t waste any time and dive straight into the sea of online payments.


I hope this section will help you clear some clouds. I’ll provide short answers to some general questions online shop owners usually ask.

Wondering how to start an eCommerce store? I have an extensive guide on the topic.

How much does PayPal charge? 

The PayPal payment processing rates vary from 1.9% to 3.5% per transaction. Also, expect a set charge from 5 to 49 cents. The cost you must pay for using PayPal depends on your product. Although it may not seem like much at first glance, the fee for a transaction worth $100 will range from $2.99 to $3.99.

How much are PayPal fees for a seller in Australia? 

The standard rate can be divided into domestic and international. See tables below:

Screenshot of PayPal's fees for receving domestic and international transactions

When paying via the service, the PayPal merchant fees in Australia may be as much as 1.21% of the entire amount.

What fees does Paypal charge?

You are required to pay a transaction charge of 2.60% + a fixed fee. The charge schedules that PayPal uses for customers are updated regularly on the official website. Try using a PayPal fee calculator to determine the fees faster.

How much is the Paypal fee for $100?

The fee for a transaction worth $100 will range from $2.99 to $3.99.

What is Paypal Fee Australia?

Wondering just how much are PayPal fees for consumers in Australia? That will be based on various factors. When you use your connected bank account or your PayPal balance to transfer money to friends or family members located inside Australia, the transaction is free for you and the receiver. 

You may also transfer money to someone abroad by using your credit or debit card, but you’ll pay the standard rate of 3.4% + AUD $0.45 per transaction.