PayPal is the easiest way to get paid by someone abroad and, in almost every case this site measures, the most expensive. Not because of one outrageous fee, but because of three ordinary ones that chain together.
The three layers
- Percentage fee. For a eurozone account, 2.9% plus a fixed amount. This is the figure every comparison quotes.
- International surcharge. If the payer is in another region, a percentage of the gross is added: 1.29% from the UK and 1.99% from the rest of the world, for a European account.
- Currency markup. If the currency has to be converted, PayPal applies its own rate with a markup it publishes per country: 3% for European accounts and 4% for US accounts. It is applied after the other two, to what is left.
What a $1,000.00 payment costs
A US client pays you $1,000.00 and your account is in Spain. Here is how it compares with Stripe and with a bank transfer to Wise:
- Card fee
- Cross-border
- Conversion
- Payout
| Fee layer | PayPal | Stripe | Wise Business |
|---|---|---|---|
| Card fee | −$29.35 | −$15.25 | — |
| Cross-border surcharge | −$19.90 | −$16.50 | — |
| Currency conversion | −$28.52 | −$19.37 | −$2.90 |
| Total cost | $77.77 (7.78%) | $51.12 (5.11%) | $2.90 (0.29%) |
The conversion alone takes $28.52, against $29.35 for the advertised fee. And because each layer is worked out on what the previous one leaves, adding up the percentages does not tell you what you pay.
How much depends on where your client is
The same Spanish account, a payment of 1,000 in each client's currency:
| Client in | PayPal fee | Effective |
|---|---|---|
| Germany (same currency) | −€29.35 | 2.94% |
| United Kingdom | −£70.98 | 7.1% |
| United States | −$77.77 | 7.78% |
Inside the eurozone you only pay the percentage fee. As soon as the region and the currency change, the cost multiplies. That is why PayPal can be fine for European clients and very expensive for US ones.
How to pay less if you have to use PayPal
- Do not convert on receipt. A business account can hold balances in several currencies. If you are paid in dollars, keep the balance in dollars and convert it with a cheaper provider, or spend it in dollars.
- Check your conversion settings. Your payment settings let you choose how payments in currencies you do not hold are handled; see which option is on.
- Raise the price, or move recurring clients to bank transfer. PayPal makes sense for a new client's first payment; not for their tenth.
- Do not use "friends and family" to get paid for work. It avoids the fee, but PayPal's terms do not allow it for commercial payments, and you lose the protection if something goes wrong.
When it is still worth it
When the client does not know you and will not share bank details, when the amount is small and convenience outweighs a couple of euros, or when your buyers simply expect a PayPal button. For everything else, compare in the calculator before you accept. The full breakdown is on the PayPal fee card, and why the conversion markup matters so much is in this guide.
Every figure in this guide is calculated from the providers' public pricing pages, with the same function as the calculator. See the methodology for what the model includes and leaves out.