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How Much Does PayPal Charge? What Should I Know About PayPal Fees as a Freelance Graphic Designer?

PayPal

If you run a small business or are a freelancer, you probably appreciate the convenience and simplicity of a service like PayPal. One click on a button on a shopping cart page and a purchase is made. This is great for your customers and of course for you. PayPal is now the second most popular online payment method in the US (after credit card payments).

However, there is a big downside for sellers and freelancers – PayPal fees.

What should you know about PayPal charges if you are a freelance graphic designer?

How Much PayPal Fees and When?

You may not know that the PayPal percentage can change depending on varying factors. This may be location, the country you are receiving money from, if you have a business account or a personal account etc. There are no PayPal fees for domestic personal transactions (between family and friends in the same country). However, there are situations that result in sellers and freelancers pay fees. This is the price you pay for utilizing the software as part of your checkout process. How much will PayPal take depends on the following situations:

  • when you receive a payment from a purchase,
  • when you send a payment using a debit/credit card,
  • when you receive money from a different country from where you are based,
  • when you move money from PayPal to a debit/credit card.

How Much Are PayPal Fees – Types of Fees PayPal Charges

PayPal

PayPal fees you pay as a freelance graphic designer can vary based on the above-mentioned circumstances. There are different types of fees PayPal may charge you (all of them can be checked in different PayPal fee calculators). How much does PayPal charge depending on the type of fee?

  • Standard domestic merchant fee – currently it’s 2.9% of the payment you receive with the addition of 30 cents for each transaction.
  • Merchant fees for international transactions – if you are based in one country and your customer is based in another, you are charged 4.4% of the amount of money your customer gives you.
  • Currency exchange fee – there is no set fee as the rates themselves change all the time.

How Much Are PayPal Fees if You Are a Freelance Graphic Designer?

Wondering how much PayPal charges if you are a freelance graphic designer?

Unfortunately, if you sell products or services (yes, graphic designers included!) you are obliged to pay a two-part transaction fee, a currency conversion fee, and even a separate fee for accepting payments from other countries.

The standard domestic merchant fee for a US seller to a US customer is $0.30 + 2.9% of the transaction amount. If you are based in a different country, the amount will be different (to check how much PayPal fees in various countries, you need to check countries at your PayPal User Agreement).

Usually, it’s 4.4% of the transaction amount + fixed fee depending on the country you are receiving money from. If a transaction requires a change in currency, the currency exchange fee is 2.5% of the transaction amount.

Additional PayPal Fees

Unfortunately, in addition to PayPal fees we have already mentioned some other fees may occur. These additional fees are based on the online business you conduct. If you are a freelance graphic designer, it is likely these additional PayPal fees will concern you. One of these fees is a money-withdraw fee.

Of course, withdrawing money directly to your bank account is free, however, there is a fee if you withdraw outside the country you are located in. Also, some banks may individually charge for a withdrawal from PayPal. There is also a reversed payment fee.

If you refund a payment to a customer, you only receive a portion of your paid fee to PayPal. The reversed payment fee for US customers is $0.30.

PayPal Fee Calculator – Is It Possible to Avoid PayPal Fees?

The good news is that there are some ways to lower PayPal fees as an online seller or freelancer. What can you do to reduce your PayPal fees?

  • Apply for Merchant Rates – if you are making at least $3,000 in sales every month, you can apply for Merchant Rates. Your fees will be lowered to 1.9% for each transaction which might be highly profitable. To apply, your PayPal account should be in good standing (no negative balance!), and you should consistently receive at least $3,000 every month.
  • Switch to micropayments – this is only for freelancers who charge their customers under $10 a piece. If most of your transactions are under $10, it is possible that you could benefit from micropayments in the long run. The standard merchant fee is 2.9% + $0.30 and the micropayment fee is 5% of the transaction.
  • Consolidate payments – when you bundle together several payments into one invoice and / or charge a customer all at once, you can lower the impact of the flat fee portion of a PayPal transaction.
  • Request ‘Friend’ payments if possible – payments sent as a friend are free of charge. If it’s possible you can ask some of your clients to use ‘Friend’ payments, however, this is risky.

Do you want to know how much PayPal will take from you as a freelance graphic designer? You can use this PayPal fee calculator to check! All you need to do is enter the amount you want to receive. 

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