PayPal Merchant Fee Calculator
Like all payment processors, PayPal charges a small fee for each transaction. This calculator will tell you exactly how much PayPal will take from any amount.
Like all payment processors, PayPal charges a small fee for each transaction. This calculator will tell you exactly how much PayPal will take from any amount.
The cost of your products, and the price you sell them for, determines how much profit you have left over. This information is vital to your budget. However, many online merchants forget to factor in the fee PayPal imposes on each transaction. If you're using a PayPal Shopping Cart, you need to be aware of this fee so you can raise your prices slightly if necessary to ensure your budget stays on track. Since PayPal's transaction fee is percentage-based, it's not always easy to calculate, so Shift4Shop has created a helpful PayPal Fee Calculator below. Simply enter the amount and the calculator will do the rest.
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PayPal is appealing to customers because they do not have to pay anything extra for making purchases through this payment processor. However, the same does not apply to the merchants utilizing PayPal. If they receive any money from a transaction made with the shopping cart, they will be charged a fee. This the price you pay for utilizing the software as part of your checkout process.
Before anything else, you should know that the standard domestic merchant fee that businesses must pay to use the PayPal Shopping Cart is 2.9% of the payment, as well as 30 cents for the whole transaction. In this case, “standard” means a situation in which a seller based in the United States accepts an online payment from a customer also based in the United States using a credit card and paying with American currency.
That sounds as typical as it gets, but not every eCommerce transaction may be like that for your business. For example, what about when the scenario we just described is exactly the same, except that the customer is shopping from somewhere outside of the United States? Alternatively, what about when the business is located in a different country? Processing payments like these may be quite different than for payments made by two parties within the same country.
As you might expect, these international transactions may also require converting currency. Perhaps the type of money being used is not the American dollar but the British pound, the Mexican peso, or the Japanese yen. This presents an additional complication to the process of exchanging currency, and the processor will need to tackle this duty on top of the ones they already have. (Note: if your business is not based in the United States, you can substitute our mentions of “30 cents” throughout this text with the equivalent rate in your country’s currency. You can see PayPal’s list of fixed fees here.)
All these transactions require different processing than the ones that meet the definition of “standard.” As a result, PayPal has rules codifying the imposition of extra fees for just about any situation that deviates from that expectation.
As you can see, the fees you have to pay can vary based on the circumstances surrounding the purchase — and there are quite a few circumstances that can affect how much you have to pay. Due to PayPal’s rules, five separate transactions in a row for the exact same item could all result in paying different charges for each of them.
Now that you know more about the different situations that may affect how much you have to pay, you should be aware of the different types of fees that PayPal may charge you. Learning the exact numbers can help you prepare for when you have to cover the costs of doing business with this shopping cart. It may also help you understand how our PayPal fee calculator reaches its conclusions. Let us break down each type for you:
Like we said before, this is how much you pay if you receive a payment from someone located in the same country as your business. It will be 2.9% of the payment you receive, with the addition of 30 cents (or the equivalent “fixed fee” that PayPal gives for your currency, if the country in question is not the United States). There is not much more to say about this.
This is where it gets interesting. If your business is based in one country and your customer is based in another, you will be charged 4.4% of the amount of money your customer gives you. As with all other transactions, you will also have to add the fixed fee — specifically, the one pertaining to the country from which your customer is shopping.
For example, if your business is registered in the United but the customer is registered in the United Kingdom, you would not pay 30 cents but rather 20 pence. PayPal would charge you a fixed fee of four pesos for your customers in Mexico and 40 yen for your customers in Japan.
This brings us to the fee for converting these pounds, pesos, and yen to dollars, or visa versa, or some other combination of currencies. There is no set fee for this because the rates themselves are always going up and down. Instead, the amount you have to pay for currency conversion changes regularly, much like with banks and exchange stations.
As we said before, the standard rate for each transaction made using PayPal is 2.9% plus 30 cents. This may seem hefty enough as is. However, if your business experiences significant growth and processes a staggering number of transactions regularly, it may come to feel even more burdensome.
If this proves to be the case, then you can send an application to PayPal for Merchant Rates, a program through which they grant you a reduced rate on the charges you have to pay.
How much they lower the percentage depends on how much money you make within one month. To clarify, let us say that you exceed $3000 in sales but do not exceed $10,000 before the monthly period ends. In this event, the transactions you receive will charge 2.5% instead — though still with a 30-cent addition to each transaction.
Let us now say that your ongoing monthly total manages to exceed $10,000 in sales. Immediately after this happens, the percentage is lowered even further to 2.2% of the purchase price (plus, you guessed it, 30 cents per transaction). These fractions of a percent may not appear to affect how much you pay at the end of the month. Despite how it may look, they can make a serious difference when you count how much you save.
Not just any eCommerce business will qualify for Merchant Rates. If you want to apply for this discount, you must make sure that you do not have a negative balance with this company. Additionally, your store must have been in business for more than 30 days. Finally, you need to consistently make over $3000 a month through PayPal. If sales fall below that threshold, you risk losing PayPal’s trust, and as a result, losing that status and that reduction in your rates.
Something important to consider when it comes to PayPal fees is the “fixed fee.” Whether the products you sell are economically priced or luxury items, you will have to pay 2.9% of the money you receive from the transaction. However, adding 30 cents to charges for items priced at $2.00 is not the same as for items priced at $200. If you offer much of your inventory at low prices, the standard fee can seriously eat away at your revenue.
If you run a business that makes less than $10 from the majority of all purchases, you can apply for a PayPal program for micropayments. Under this system, you would pay a much higher percentage of each transaction: 5%. However, the fixed fee would be dropped altogether, which can actually save you money from each transaction than with the standard merchant fee.
PayPal is extremely popular for a variety of reasons, but not every business is willing or able to include these fees in their budget. We understand this, which is why we do not make PayPal the only option available to our clients. Shift4Shop is powered by Shift4 Payments, an industry-leading payment processor that allows you to accept credit cards directly as well as several alternate payment types. Additionally, Shift4Shop is also capable of connecting your online store to a wide variety of alternative payment methods including "buy now, pay later" customer financing, digital wallets, cryptocurrency, international payments, and many more. Our software gives you the freedom to decide whether or not you include PayPal as part of your checkout process.