PayPal is easy for clients to pay, but it is rarely free for you. On a UK invoice you lose 2.9 percent plus 30p before the money reaches your balance, and an overseas client can push the total loss past 7 percent. This guide shows every fee, with worked examples, so you can price with the deduction already covered.
You are here because you want one thing: to know exactly how much PayPal takes from a freelance invoice, and what you actually keep. That answer is in the next section. The rest of the guide covers international payments, currency conversion, and how to set your price so the fee stops coming out of your profit.
How much does PayPal charge freelancers per invoice?
For a UK freelancer, PayPal charges 2.9 percent plus £0.30 on a domestic commercial payment, so a £1,000 invoice costs £29.30 and you keep £970.70. International clients add 1.29 percent from the EEA or 1.99 percent elsewhere, plus a 3 percent currency conversion spread where it applies.
There is no fee to create or send a PayPal invoice. The fee lands when your client pays. PayPal deducts it automatically, which is why the amount that arrives is always lower than the amount you invoiced. If you have ever opened your balance and wondered where £29 went, this deduction is the reason.
Fees last verified: October 2026, against PayPal’s UK merchant fee page, which PayPal last updated on 1 October 2026. Rates differ by country, so the US figures are shown separately below.
Every PayPal fee at a glance
PayPal does not charge one simple fee. It stacks a percentage, a fixed fee, and, for cross-border work, two extra layers. Here is the full picture for a freelancer receiving payment.
| Fee | UK freelancer receiving | US freelancer receiving |
|---|---|---|
| Domestic commercial transaction | 2.9 percent + £0.30 | 3.49 percent + $0.49 via PayPal Checkout or invoicing; 2.99 percent + $0.49 for standard card payments |
| International surcharge | +1.29 percent (EEA sender) or +1.99 percent (rest of world) | +1.5 percent |
| Currency conversion | 3 percent above the base exchange rate | Conversion spread included in PayPal’s transaction exchange rate |
| Withdrawal to your bank | No fee when no conversion is involved | No fee for standard transfer; instant transfer costs extra |
| Sending an invoice | No fee | No fee |
Sources: PayPal UK merchant fees and PayPal’s US merchant fee schedule, both checked in October 2026. The fixed fee changes with the currency you receive: £0.30 in sterling, $0.30 in US dollars on the UK schedule, and €0.35 in euros.
Two of these fees catch freelancers out. The international surcharge applies based on where your client is, not where you are. And the conversion spread is invisible on the invoice itself. You only see it in the exchange rate PayPal uses when it turns your client’s dollars into your pounds.
Tip: If a client pays in a foreign currency, ask PayPal to leave the balance in that currency when you can, and compare the cost of converting it elsewhere before you accept PayPal’s rate. The 3 percent spread is often the biggest single fee on the payment.
What do you keep on a £500, £2,000 and £5,000 invoice?
The fastest way to understand PayPal fees is to watch them grow with the invoice. The table below uses the UK domestic rate of 2.9 percent plus £0.30, for a UK client paying in pounds, with no conversion.
| Invoice | Arithmetic | Fee | You keep |
|---|---|---|---|
| £500 | 2.9 percent of £500 = £14.50, plus £0.30 | £14.80 | £485.20 |
| £1,000 | 2.9 percent of £1,000 = £29.00, plus £0.30 | £29.30 | £970.70 |
| £2,000 | 2.9 percent of £2,000 = £58.00, plus £0.30 | £58.30 | £1,941.70 |
| £5,000 | 2.9 percent of £5,000 = £145.00, plus £0.30 | £145.30 | £4,854.70 |
Worked example, step by step. You invoice a UK client £2,000 for a branding project. PayPal takes 2.9 percent of £2,000, which is £58.00. It adds the £0.30 fixed fee, so the total deduction is £58.30. You receive £2,000 minus £58.30, which is £1,941.70. Run your own invoice size through LancerBill’s PayPal fee calculator before you quote, and the deduction stops being a surprise.
Notice what the fixed fee does to small invoices. On a £50 invoice the fee is £1.75, which is 3.5 percent of the job. On a £100 invoice it is £3.20, or 3.2 percent. The smaller the invoice, the harder the 30p bites. If you send lots of small invoices, batching work into fewer, larger invoices genuinely reduces what you lose.
What does an international PayPal payment really cost?
An international PayPal payment to a UK freelancer costs the domestic fee, plus a surcharge of 1.29 percent for an EEA client or 1.99 percent for a client anywhere else, plus a 3 percent conversion spread if the payment arrives in another currency and PayPal converts it to pounds for you.
Here is the same £1,000 invoice, three ways. A UK client costs you £29.30. An EEA client costs you 4.19 percent plus £0.30, which is £41.90 plus £0.30, a total of £42.20, so you keep £957.80. A client outside the EEA costs you 4.89 percent plus £0.30, which is £49.20 in total, so you keep £950.80 before any conversion.
Now add conversion. Say your US client pays the dollar equivalent of £1,000 and PayPal converts it to pounds. The transaction fee is £49.20, leaving £950.80. The 3 percent conversion spread then applies to the converted amount, costing roughly £28.52 more. Your total loss is about £77.72, and you keep roughly £922.28 from a £1,000 invoice. That is an effective rate of about 7.8 percent, from fees that each looked small on their own.
Watch out: Quoting overseas clients the same price as UK clients means you absorb all three fee layers yourself. Either quote in your own currency and let the client’s side handle conversion, add a clear international price, or switch that client to a cheaper rail. Our guides to Upwork fees and Fiverr fees show how the same stacking happens inside marketplaces.
How do you price so the fee does not eat your rate?
Divide, do not add. If you simply add 2.9 percent to your price, you still lose money, because PayPal charges its percentage on the higher invoice total, not on your target amount. The correct formula is: invoice amount = (amount you want to keep + fixed fee) divided by (1 minus the percentage rate).
Worked example. You want to keep exactly £1,000 from a UK client. Add the £0.30 fixed fee to get £1,000.30. Divide by 1 minus 0.029, which is 0.971. That gives £1,030.18. Check it: 2.9 percent of £1,030.18 is £29.88, plus £0.30 is £30.18, and £1,030.18 minus £30.18 is exactly £1,000.00.
| You want to keep | Invoice this (UK domestic) | PayPal takes |
|---|---|---|
| £250 | £257.78 | £7.78 |
| £500 | £515.24 | £15.24 |
| £1,000 | £1,030.18 | £30.18 |
| £2,500 | £2,574.97 | £74.97 |
Whether you show this as a higher price or absorb it is a commercial choice. Most freelancers build payment costs into their standard rate, which keeps invoices clean. Check the margin that leaves you with LancerBill’s profit margin calculator. If the fee wipes out your margin on a job, the job was priced too tightly before PayPal got involved.
PayPal vs the alternatives: when is it worth paying?
PayPal is worth its fee when a client trusts it, pays faster because of it, or has no easy alternative. It is hard to justify when the same client would happily pay by bank transfer or a cheaper card rail. On a £1,000 UK invoice, PayPal takes £29.30. Stripe’s standard UK card rate of 1.5 percent plus 20p takes £15.20. A domestic bank transfer, or receiving into a Wise account on a domestic route, can cost you nothing at all.
| Situation | Sensible default | Why |
|---|---|---|
| New overseas client, first job | PayPal | Familiar, fast, and the buyer protection reassures a client who does not know you yet |
| Regular UK client, monthly work | Bank transfer | No percentage fee, and the relationship already carries the trust PayPal was providing |
| Client insists on paying by card | Card payment via Stripe or similar | UK card rate of 1.5 percent plus 20p is roughly half the PayPal cost on most invoices |
| Regular client in another currency | Multi-currency account such as Wise | Avoids the 3 percent conversion spread, which is PayPal’s most expensive layer |
| Very small invoices, under £100 | Batch or use a cheaper rail | The 30p fixed fee pushes the effective rate to 3.2 percent or more |
Whichever rail you choose, the invoice itself still needs to be clear, numbered, and dated. Create it with LancerBill’s free invoice generator, state your payment method and terms on it, and you remove the other big cause of late payment: confusion.
Key takeaways
- UK freelancers pay 2.9 percent plus £0.30 per domestic PayPal payment, so a £1,000 invoice returns £970.70.
- International clients add 1.29 percent (EEA) or 1.99 percent (rest of world), before conversion.
- PayPal’s 3 percent conversion spread is the hidden layer that can push a cross-border invoice past 7 percent in total fees.
- Gross up with a division, not an addition: to keep £1,000 in the UK, invoice £1,030.18.
- The fixed 30p fee hits small invoices hardest, so batch small jobs where you can.
- PayPal earns its fee on first jobs with new overseas clients. For regular clients, cheaper rails usually win.
Frequently asked questions
Does PayPal charge a fee to send an invoice?
No. Creating and sending a PayPal invoice is free. You only pay when the client pays it, and PayPal deducts the commercial transaction fee from the amount you receive.
How much does PayPal take from a £1,000 invoice?
From a UK client paying in pounds, PayPal takes £29.30 (2.9 percent plus £0.30), so you keep £970.70. From a client outside the EEA, the fee rises to £49.20 before any currency conversion, and conversion can take roughly another 3 percent.
Why did I receive less than the amount I invoiced?
PayPal deducts its fee before the money reaches your balance. If the shortfall is bigger than 2.9 percent plus 30p, check for the two extra layers: an international surcharge of 1.29 or 1.99 percent, and a 3 percent currency conversion spread if the payment arrived in another currency.
Can I charge my client the PayPal fee?
You can build payment costs into your price, and most freelancers do. Adding a separate surcharge is riskier: UK rules ban surcharging most consumer card payments, and clients dislike surprise fees. A cleaner approach is a standard rate that covers processing, with bank transfer offered as the default for regular clients.
Are PayPal fees tax deductible for UK freelancers?
Payment processing fees you pay to earn your income are generally an allowable business expense for UK sole traders, so keep your PayPal fee reports with your records. Your exact position depends on your circumstances, so confirm with your accountant if the amounts are large.
How can I reduce the PayPal fees I pay?
Invoice in your own currency to avoid the conversion spread, batch small jobs into fewer invoices to dilute the fixed fee, move regular clients to bank transfer or a multi-currency account, and gross up your prices using the division formula in this guide so the fee is covered before you start work.
Fees last verified: October 2026. PayPal changes its rates from time to time, so check the fee shown in your account before relying on a figure for a large invoice.
How a client pays also decides which tax form you receive: our Form 1099-NEC guide explains why card and payment-app payments are reported differently from checks.
This guide is for general information only and is not financial, tax or legal advice.