PayPal Invoice Fees: Rates, Refunds, and What Buyers Pay

PayPal invoice fees start at 2.99% plus $0.49 per transaction for standard U.S. credit and debit card payments and climb from there depending on how your customer pays. Sending the invoice itself costs nothing; PayPal takes its cut from the payment before the money lands in your balance. International payments, currency conversions, refunds, and disputes each add their own costs on top.

Sending an Invoice Is Free

Creating and sending invoices through PayPal costs nothing, whether you have a personal or business account, and there is no limit on how many you can send. PayPal also sells an optional Invoice Subscription Service at $14.99 per month for extra features, but the standard invoicing tool does not require it.¹ The cost only arrives when your customer pays.

Fees by Payment Method

Each rate below includes a fixed $0.49 charge per transaction on top of the percentage.¹

Standard credit and debit cards, Apple Pay, or other third-party wallets: 2.99% + $0.49
PayPal Checkout, Venmo, or PayPal Guest Checkout: 3.49% + $0.49
PayPal Pay Later options: 4.99% + $0.49
Pay by Bank (ACH): 1%, capped at $10.00 per transaction

On a $1,000 invoice paid by credit card, PayPal keeps $30.39 and you receive $969.61. The same invoice paid through PayPal Checkout costs $35.39, and Pay Later pushes the fee to $50.39. ACH is by far the cheapest at a flat $10.00 on that amount.¹

You will not see a separate bill. PayPal subtracts the fee from the gross payment before the funds appear in your balance, and your activity log shows both the gross amount and the fee for your records.

Micropayment Rate for Small Invoices

If you regularly invoice small amounts, PayPal offers a micropayment rate of 4.99% plus a reduced fixed fee of $0.09 per transaction.¹ The percentage is higher, but the smaller fixed fee wins on payments under roughly $10. A $5 payment costs about $0.64 at the standard rate and about $0.34 at the micropayment rate.

International Payments Cost More

When a customer outside the United States pays your invoice, PayPal adds a 1.50% international transaction fee on top of the standard rate, regardless of payment method. A $1,000 credit card payment from an international customer costs 2.99% + 1.50% + $0.49, or $45.39. The international surcharge appears as part of the single combined deduction on the transaction, not a separate line.¹

Currency Conversion

If the payment also involves converting currency, PayPal applies a markup of roughly 3% to 4% above the mid-market exchange rate, built into the rate itself rather than shown as a separate charge.² That spread stacks on top of the processing fee and the 1.50% international surcharge. On a $1,000-equivalent invoice paid in a foreign currency by credit card, the combined costs can reach roughly $75 to $85.

One way to trim this is to hold a foreign currency balance in your PayPal account and convert it manually at a time of your choosing rather than letting PayPal convert each incoming payment automatically.

Refunds Do Not Return the Fee

PayPal does not charge a separate fee to issue a refund, but the processing fee from the original payment is not returned to you.¹ If a $500 invoice paid by credit card cost you about $15.44 in fees and you later refund the full $500, that $15.44 stays with PayPal. A full refund is effectively a loss of both the revenue and the original processing cost, so a business with a meaningful refund rate should account for it in pricing.

Disputes and Chargebacks

Disputes and chargebacks carry their own charges on top of the original processing costs.

Standard Dispute Fee: $15.00 per dispute filed through PayPal’s resolution center, or as a chargeback on a payment made from a buyer’s PayPal account.³
High Volume Dispute Fee: $30.00 per dispute if you had more than 100 sales in the prior three months and your dispute rate reached 1.5% or higher.⁴
Credit or Debit Card Chargeback: $20.00 per chargeback when the original transaction did not go through the buyer’s PayPal account.³

If PayPal or the card issuer resolves a standard dispute in your favor, the $15.00 fee is not charged.⁵ A high dispute rate not only doubles the per-dispute fee but can also trigger account reviews.

What Buyers Pay

If you are paying an invoice rather than sending one, there is generally no fee for a purchase in your own currency.⁶ The exception is a payment that requires converting between currencies, where the same conversion markup described above applies to the buyer.

Tax Reporting on What You Receive

PayPal reports invoice payments to the IRS on Form 1099-K once your gross payments for goods and services exceed $20,000 and you have more than 200 transactions in a calendar year. Under the One Big Beautiful Bill Act, the reporting threshold reverted to these pre-2022 levels.⁷ Even if your volume stays below that threshold, invoice income is still taxable and must be reported.⁸

1
PayPal. Fees – Merchant and Business – PayPal US
2
PayPal. Currency Conversion Fees – The Real Cost of Cross-Border Shopping
3
PayPal. Merchant and Seller Fees – February 2026
4
PayPal. When Is the Dispute Rate Applied and How Is It Calculated?
5
PayPal. PayPal User Agreement
6
PayPal US. PayPal Consumer Fees
7
Internal Revenue Service. Treasury, IRS Issue Proposed Regulations Reflecting Changes From the One Big Beautiful Bill
8
PayPal US. Will PayPal Report My Sales to the IRS?