PayPal Merchant Processing & Reverse Invoicing Formulas
PayPal fees combine a variable percentage cut with a fixed per-transaction fee schedule:
1. Forward Net Payout Formula
Net Payout = Gross - [ (Gross × Rate_%) + Fixed Fee ]
2. Reverse Invoicing Formula (Ask Client to Cover Fees)
Request Amount =
Target Net Cash + Fixed Fee1 - (Rate_% / 100)
Step-by-Step Processing Breakdown
Step 1: Determine Transaction Mode & Tier Rates
Mode: FORWARD | Applied rate: 2.99% + fixed fee.
Step 2: Calculate PayPal Deducted Fee
Fee deduction = $3.48 (3.48% effective).
Step 3: Final Financial Settlement
Net Payout=$96.52
PayPal Merchant Rate Schedule (2026)
| Transaction Type | Percentage Fee | Fixed Fee |
|---|---|---|
| US Commercial (Standard) | 2.99% | $0.49 USD |
| International Commercial | 4.49% | $0.49 USD |
| QR Code ($10.01+) | 1.90% | $0.10 USD |
| Micropayments (<$10) | 5.00% | $0.05 USD |