PayPal Invoice Fee

Panna Kemenes

The PayPal invoicing service is free. There are no subscription fees for sending or managing online invoices. However, PayPal does charge fees for business owners to receive invoice payments.

It’s worth knowing what these fees will be before you start using PayPal invoicing.

Read on to discover the PayPal invoice fee breakdown and ways you may be able to avoid this fee.

Receive international invoice payments
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PayPal Invoice fees

Although it is free to send and manage online invoices with PayPal, you'll have to pay a fee once you get paid.¹

So, what percentage does PayPal take from invoices?

Collecting invoice payments to your PayPal account incurs a 3.49% charge and a $0.49 flat fee per transaction if it's within the US.²

For payments from other countries, there’s the same 3.49% transaction fee. There’s also an additional 1.50% rate for international transactions, and a fixed fee based on the currency you received.

If you wish to convert the received payments to your local currency, the set rate is 3.0% above the base exchange rate.³

The receiver (your business) is responsible for these fees, which are automatically deducted.

You can calculate how much PayPal will charge you with this simple PayPal fee calculator from Wise.

How do I send an invoice on PayPal without fees?

Avoid PayPal invoice fees with Wise Business

One way to avoid the currency conversion fees set by PayPal is to use the Wise Business account to receive or convert your international payments.

With the Wise Business account, you can receive payments in 10 major currencies such as EUR, GBP, NZD, AUD, and PLN like a local. You can also download a free invoice template. Simply add your local account details with Wise to easily collect payments.

Wise Business integrates with invoicing software such as QuickBooks to take advantage of other features the tool offers. This can save hours on admin when managing invoices.

But it's not only the receiving fee that you need to consider when collecting PayPal invoice payments.

Once you’ve received the funds to your PayPal account, you’ll need to somehow withdraw them to your local bank account. If you have to convert the collected funds through PayPal, there would be an additional fee of 3.0%. For example, withdrawing €1000 to your USD account will cost around $33 with PayPal.

On the other hand, Wise charges $5.21 for the same transaction, so you can save around $28 on fees.

Meet Wise Business: A great PayPal alternative

Connect your PayPal Merchant Account to lower invoice fees

If you collect payments from your website, PayPal is a reliable payment gateway. Even though the service has costs, it comes with necessary features, especially if you have your own website and need a payment gateway to process credit card payments.

However, once you've collected the payments to your PayPal account, you have the option to withdraw the money to your Wise account to avoid the PayPal conversion fee.

Here’s how you can connect your Wise account with PayPal

  1. Register with Wise Business for free 🚀

  2. Once the account is ready, go to ‘balances’ and click on ‘get started’. You’ll have to choose which currency to activate first. If you wish to add more currencies, click on ‘Open a balance’ from the ‘balances’ page.

  3. Once the accounts have been activated, you’ll see your account details under each currency.

  4. Copy your account details from your Wise account (make sure that you select the correct currency).

  5. Log in to your PayPal account and select ‘Wallet’ from the menu, then click ‘Link a Card or Bank Account’ - select the option to add a bank account.

💡 If you collect payments from your customers through bank transfer, you don’t need a payment gateway. You can simply add your Wise Business account details to the invoice and send it to your customers to get paid with ease.

Claim PayPal invoice fees as a business expense

PayPal fees can be reported on Schedule C under ‘Other income’ as ‘Business income’. PayPal invoice fees are tax-deductible. This means your taxable income will be reduced if you report them as a business expense.⁴

Be sure to keep records of your PayPal invoice fees in case of a tax audit. Check the business tax deadline dates to be sure to file on time.

💡 For all you need to know about invoices, don't forget to read and bookmark the ultimate guide to invoicing from Wise!
🔍 Want to learn more about PayPal invoices? Read the PayPal invoice guide next.


  1. PayPal invoicing
  2. PayPal -Fees
  3. PayPal -Currency conversion fees
  4. PayPay business expense

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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