PayPal fees apply in a handful of specific situations: sending money with a credit or debit card, receiving payments as a seller, converting currencies, moving money to your bank instantly, and using ATMs outside the free network. Opening an account, buying from merchants, and sending money to friends and family from your balance or linked bank account cost nothing.
What You Can Do for Free
Checking out at a store or website that accepts PayPal costs you nothing as the buyer. The merchant absorbs the processing cost. The same applies to in-app purchases and QR code payments at physical stores.
Sending money to friends or family is free when the funds come from your PayPal balance or a linked bank account. Standard bank transfers out of PayPal are also free if you can wait one to three business days for the ACH network to move the money.1PayPal. How to Withdraw Funds from Your PayPal Account
When Sending Money Costs You
Using a credit or debit card to send money triggers a fee of 2.90% of the amount plus a $0.30 fixed fee for U.S. dollar transactions.2PayPal. PayPal Consumer Fees A $200 payment sent this way costs $6.10 on top of the amount.
When you start a payment, PayPal asks whether it’s for friends and family or for goods and services. That dropdown matters. Picking goods and services on a personal payment shifts the fee onto the recipient and gives them seller responsibilities they don’t need. Picking friends and family for a purchase strips the buyer of purchase protection. Choose the one that matches what the money is actually for.
Fees Sellers Pay on Payments Received
Every payment marked as goods and services has a percentage plus a fixed fee taken out before the balance lands in your account. The rate depends on how the payment was processed. Domestic U.S. rates:
- PayPal Checkout and guest checkout: 3.49% plus $0.49
- Standard credit and debit card payments: 2.99% plus $0.49
- Peer-to-peer goods and services: 2.99% with no fixed fee
- QR code transactions: 2.29% plus $0.49
- Pay Later options: 4.99% plus $0.49
The fixed fee is $0.49 per transaction for payments received in U.S. dollars.3PayPal. PayPal Merchant Fees A $100 sale run through PayPal Checkout leaves you with about $96.02 after fees.
Confirmed 501(c)(3) nonprofits qualify for discounted rates on donations. Standard donation buttons default to 2.89% plus a fixed fee, and eligible organizations should contact PayPal directly to confirm the charity rate.2PayPal. PayPal Consumer Fees
International Payments and Currency Conversion
Cross-border transactions carry two costs that stack. On the seller side, PayPal adds 1.50% on top of the domestic rate for international commercial payments.3PayPal. PayPal Merchant Fees A seller taking an international payment through PayPal Checkout ends up at 4.99% plus $0.49.
Then there’s the currency conversion spread, the margin PayPal adds above the mid-market exchange rate. Personal payments sent in a different currency than the recipient uses carry a 4.00% spread. Most other conversions run 3.00%.3PayPal. PayPal Merchant Fees Send $500 abroad with a conversion required and roughly $20 disappears into the exchange rate markup before the transaction fee applies.
The spread is baked into the rate you see at checkout rather than shown as a separate line.4PayPal. PayPal Currency Calculator and Exchange Rates If your card issuer offers to handle the conversion instead, compare rates. Many credit cards charge 1% to 3%, which can beat PayPal’s spread.
Getting Money Out
Standard transfer from your PayPal balance to your bank is free and takes one to three business days.1PayPal. How to Withdraw Funds from Your PayPal Account Instant transfer to a linked debit card or bank account costs 1.75% of the amount, with a $0.25 minimum and a $25.00 cap.2PayPal. PayPal Consumer Fees A $1,000 instant transfer costs $17.50. Above roughly $1,430, the fee hits the $25 ceiling.
Adding cash to your account at participating retail stores costs up to $3.95 per deposit.5PayPal. Add Cash in Store with PayPal Transferring from a linked bank avoids that.
The PayPal Debit Mastercard is free to use at MoneyPass ATMs in the U.S. Non-MoneyPass ATMs cost $2.50 from PayPal, plus whatever the ATM operator adds.6PayPal. PayPal Debit Card A single withdrawal at the wrong machine can run $5 or more in combined charges.
Disputes, Chargebacks, and Refunds
Sellers pay $15.00 when a buyer escalates a claim through PayPal’s Resolution Center. If your dispute rate reaches 1.5% or more of total sales over the previous three months, with more than 100 transactions, you move into the high volume category and the fee doubles to $30.00.3PayPal. PayPal Merchant Fees The standard fee is waived when the dispute resolves between buyer and seller without escalation, or when the claim is for an unauthorized transaction.7PayPal. What Is the PayPal Dispute Fee and Why Was I Charged One
A chargeback, where the buyer disputes the charge with their credit card company instead of through PayPal, costs the seller a flat $20.00 regardless of outcome.3PayPal. PayPal Merchant Fees Lose the dispute and you lose the transaction amount too.
Refunds are free to issue, but PayPal keeps the original transaction fee. If PayPal took $3.98 on a $100 sale and you refund the buyer the full $100, the $3.98 is gone.8PayPal. How Do I Issue a Refund High return rates compound this: you pay processing on revenue you never keep.
Tax Reporting and Backup Withholding
PayPal doesn’t charge a tax reporting fee, but two related mechanics affect what shows up in your account. For 2026, PayPal must send you and the IRS a Form 1099-K if your reportable payment transactions exceed $20,000 and you have more than 200 transactions during the year. Both conditions must be met.9Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One Big Beautiful Bill Not receiving a 1099-K doesn’t make the income tax-free; you still have to report it.
If your name or Social Security number on file with PayPal doesn’t match IRS records and you don’t fix it by the deadline, PayPal must withhold 24% of your payments and send it to the IRS as backup withholding.10PayPal. PayPal Savings – Backup Withholding Friends and family payments are exempt because they aren’t reportable income. Keeping your tax details current in your account settings prevents this.
What PayPal Doesn’t Charge For
There’s no inactivity fee for U.S. accounts. An account can sit dormant for years without charges.11PayPal. What Is the Inactivity Fee Some accounts in the European Union and Canada do face inactivity fees, so this exemption is specific to U.S.-based accounts. A standard personal account has no monthly maintenance fee, no annual fee, and no minimum balance requirement.