Opening and holding a PayPal account is free, and paying for things is free; PayPal fees show up when you receive payments for goods or services, cash out instantly, send personal money with a credit card, or move money across currencies. The exact rates are below, grouped by what you’re actually doing.
What PayPal Doesn’t Charge You For
Creating a personal or business account costs nothing. No sign-up fee, no monthly charge, no minimum balance.1PayPal. What Are PayPal Account Fees U.S. accounts also carry no inactivity fee, though PayPal does charge one in parts of the EU and in Canada.2PayPal. What is the inactivity fee?
Buying things in the United States is free on the buyer’s side no matter how you fund the purchase: balance, linked bank, or credit card.3PayPal. PayPal Consumer Fees The seller pays the processing cost. The exception is when a currency conversion is involved, covered further down.
Sending money to friends and family inside the U.S. is also free when you fund it from your PayPal balance or a linked bank account.4PayPal. PayPal Payment Types: Personal Payments vs Goods
Fees for Receiving Payments as a Seller
Anything marked as a Goods and Services payment triggers a fee for the person receiving the money. This is where most PayPal charges live.
The standard domestic rate is 2.99% plus $0.49 per transaction.5PayPal. PayPal Merchant Fees A $100 payment nets you $96.52. The rate is the same whether the buyer pays from a bank, a balance, or a card.
Sellers who process a lot of small payments can apply for micropayments pricing at 4.99% plus a lower fixed fee.5PayPal. PayPal Merchant Fees The higher percentage stings less than the fixed cost on very small tickets, so if most of your sales are under about $5, this structure usually saves money.
Registered 501(c)(3) organizations with confirmed charity status pay a discounted 1.99% plus $0.49 per donation, a full point below standard.6PayPal. Charity Confirmation
When Sending Money Costs You
If you fund a personal payment with a credit or debit card instead of a bank, the sender pays 2.90% plus $0.30.3PayPal. PayPal Consumer Fees A $50 card-funded transfer costs $1.75. The recipient pays nothing. Link a bank account and pick it as your funding source to avoid this.
Moving Money From PayPal to Your Bank
You have two realistic ways to cash out.
A standard bank transfer is free and lands in one to three business days.7PayPal. How to Withdraw Funds from Your PayPal Account
An instant transfer to a bank or debit card costs 1.75% of the amount, with a $0.25 minimum and a $25 cap.3PayPal. PayPal Consumer Fees A $500 withdrawal costs $8.75. The cap matters at higher amounts: a $2,000 instant transfer would mathematically run $35, but PayPal holds it to $25, so the effective rate improves as the withdrawal gets larger.
International Transactions
Cross-border payments layer two costs onto the base transaction fee.
Receiving a commercial payment from another country adds a 1.50% international surcharge on top of the standard rate, so the effective rate becomes 4.49% plus $0.49.5PayPal. PayPal Merchant Fees A $200 international sale runs $9.47 in combined fees.
When PayPal converts currency, it adds a spread of 3% over the base exchange rate for most transactions, or 4% when you buy goods in a foreign currency or send personal money in a different currency.3PayPal. PayPal Consumer Fees The spread stacks on top of the international transaction fee. A $1,000 payment from a European buyer can cost roughly $50 to $90 all in, depending on how the currency piece works out. Compare PayPal’s quoted rate against a neutral source like Google Finance before accepting large cross-border payments.
Chargebacks, Disputes, and Refunds
Things that go wrong come with their own costs on the seller side.
A chargeback filed through the buyer’s card company costs the seller $20 on top of the disputed amount.5PayPal. PayPal Merchant Fees The fee is waived if PayPal’s Seller Protection covers the transaction.8PayPal. What is the chargeback fee?
A dispute filed inside PayPal’s own resolution center and decided against the seller costs $15, or $30 for sellers with a high dispute rate.5PayPal. PayPal Merchant Fees
Refunds don’t carry a separate processing fee, but PayPal keeps the original transaction fee you paid when the money came in.9PayPal. How do I issue a refund? Refund a $100 payment in full and you’re out the original $3.48. Build that loss into your return policy if you deal in higher ticket items.
Tax Reporting for Sellers
Not a fee, but it comes up alongside the fee questions. PayPal must send you a Form 1099-K when your gross goods-and-services payments exceed $20,000 and your transactions exceed 200 in a calendar year. Both thresholds have to be met.10Internal Revenue Service. IRS issues FAQs on Form 1099-K threshold under the One Big Beautiful Bill The One Big Beautiful Bill Act, signed in mid-2025, permanently restored those figures after years of uncertainty around a $600 threshold that never took effect. Some states set lower thresholds of their own, so a 1099-K can still arrive at smaller amounts depending on where you live. The form is a reporting rule for PayPal, not a tax exemption for you: income under the threshold is still taxable.
If PayPal doesn’t have a valid taxpayer identification number on file, the IRS requires it to hold back 24% of your payments as backup withholding.11Internal Revenue Service. Publication 15 (Circular E), Employer’s Tax Guide Confirm your tax details in your account settings to avoid it.