One way to lower your PayPal fees is to opt to be paid less often.
I have some clients who pay me weekly, some that pay me twice a month, and others that only pay me once a month. There are a lot of benefits of getting paid by your clients more often. Getting paid more often can help you avoid cash flow problems in your business.
But, one major downside of getting paid more often is paying more PayPal fees.
This is because PayPal not only charges you a percentage of the money you receive, but they also charge you a fee for every transaction.
The fee for each transaction is $0.30 USD, plus 2.9% of the amount you receive for funds you receive from the U.S. For funds being received from outside the U.S., the fee for each transaction is 4.4% plusa fixed fee that variesdepending on the country the funds are coming from.
By opting to be paid only once a month you’ll avoid some of these one-time transaction PayPal fees. Yes, it’s only $0.30 per transaction, but savings is savings.
You just need to make sure your business can handle the change in cash flow that comes with only getting paid once a month instead of more often.
2. Change How You Take Your Money Out of PayPal
After you get paid in your PayPal account, how do you take your money out? If you request a paper check from PayPal, you’ll be charged another fee of $1.50. To access your money faster and avoid this fee, you should do one of two things.
Request a Free PayPal Debit Mastercard
Having a PayPal Debit Mastercard will let you access your money right away.
This card has no fee for use at any retailers that take debit cards. You can also use the card at an ATM to withdraw cash —up to $400 each day. But, using your card at an ATM may result in fees.
Transfer Money from PayPal Directly to Your Bank Account
This method of accessing your money has no fee. Plus, PayPal has also sped up the amount of time it takes to transfer money into your bank account. It used to take up to 3–4 business days, but now they estimate that funds should arrive in 1 business day.
This is how I choose to access my money from PayPal most of the time to avoid fees of any kind.
3. Ask to Be Paid as a Friend or Family
As I said before, whenever you receive money from clients, you’ll be charged a fee of $0.30 plus 2.9% of the amount. However, this is only true for money received for goods or services.
If your client opts to send you money via the friends or family option in PayPal instead, you won’t be charged a fee for receiving the money. The client also won’t be charged a fee to send money via this method if they use their PayPal balance or a bank account, or a combination of both. If they send money using a debit or credit card, they will have to pay a fee to send you the money.
4. Factor PayPal Fees into Your Payment Equation
A tip I’ve picked up that doesn’t really reduce your PayPal fees, but helps you to feel better about them, is factoring them into your payment equation.
For example, instead of charging your client $50 for a blog post, you could increase your rate to $52 per blog post. This will help you cover those fees so you are still making $50 after the fees are taken out of your earnings.
Another way to avoid PayPal fees is to ask your clients to pay the fees instead. Make sure you get this in writing as part of your contract. Then you can include a 3–4% fee at the bottom of each invoice to cover your PayPal fees.
Most clients are totally OK with this. You just need to ask!
5. Include PayPal Fees as an Expense on Your Tax Return
Did you know you can deduct PayPal fees on your tax return? This won’t lower the PayPal fees you pay throughout the year. But, it will help you lower your tax bill so you can keep more of your money that way instead.
Just add up how much you paid in PayPal fees throughout the year and include that amount on your Schedule.
6. Consider Other Payment Methods
Of course, the easiest way to decrease your PayPal fees is simply to request your clients use other forms of payment.
Many companies offer direct deposit. With this option, you’ll be able to get paid just as quickly. Plus, you can avoid PayPal fees and transfer times altogether.
If direct deposit isn’t an option, you can always go back to an old standby method: a paper check. Getting paid via paper check will take longer, but there won’t be any PayPal fees.
Please share your experience with PayPal or other payment platforms in the comment session.