Free tools
What PayPal actually costs you
The transaction fee is the part you can see. If the payment arrives in another currency there is a second charge of 3%, taken inside the exchange rate, and it never appears on a statement.
PayPal’s published UK rates for standard commercial transactions, as at 12 August 2026. Rates for QR code and card-funded payments differ, and your own contract may too. The conversion charge is applied to the balance PayPal converts, which is the payment after the transaction fee. VIP360 is not affiliated with PayPal.
No sign-up, no email address. It runs entirely in your browser and nothing you type is sent anywhere.
The fee you see, and the one you do not
Most sellers can quote their transaction rate from memory. Very few can tell you what conversion cost them last year.
A transaction fee is charged, so it shows up. You get a payment of £1,000 and a fee of £29.30, and the arithmetic is done in public. A conversion margin is not charged, it is priced in: you are handed an exchange rate that is 3% worse than the one PayPal used, the money lands, and nothing on the statement says a fee was taken.
Which means the two are easy to compare and almost never compared. On a £1,000 payment from a US customer, the transaction fee is £49.20 and the conversion takes a further £28.52, so the invisible charge is more than half the visible one. Run the same £1,000 at the domestic rate and the conversion costs £29.12 against a £29.30 fee: the charge nobody counts has drawn level with the charge everybody quotes.
The fix is not a better rate on the conversion. It is not converting: if you hold the currency you sell in, money settles into an account in that currency and stays there until you choose otherwise. How holding a currency changes the cost →
Before you change anything
- Check which rate you are actually on. PayPal publishes several. The one in the calculator is the standard commercial rate, and card-funded and QR code payments are priced differently.
- Count a year of conversions, not a payment. The per-transaction number looks survivable. Multiply it by your overseas volume and it stops looking that way.
- Do not surcharge a consumer to cover it. It is banned in the UK, and it is the first thing people reach for. Build the cost into the price instead, which is legal and simpler.
- Ask for a rate. Published pricing is a starting position. Volume moves it.
Related
If the wider question is what taking card payments should cost: every fee category named, or the category code that sets your pricing. If the money is arriving from abroad, an account in the currency you sell in is the change that removes the conversion rather than renegotiating it.
Frequently asked questions
For a standard commercial transaction from a UK buyer, 2.9% plus a fixed fee of 30p. If the buyer is elsewhere in the EEA, add 1.29%. If they are outside it, add 1.99%. PayPal publishes lower rates for QR code payments and for card-funded payments through its online card services, so check which one your account is actually on.
You cannot simply add the percentage back on, because the fee applies to the larger figure too. Divide the amount you want by one minus the rate, then add the fixed fee before dividing. The calculator above does it for you and shows the result underneath the breakdown.
Three per cent above the base exchange rate when PayPal converts money for a business account. It is the fee people forget, because it is never itemised: it is taken inside the rate you are given rather than charged as a line. On a payment converted from another currency it usually costs more than the transaction fee sitting next to it.
Not to a consumer. UK law bans surcharging a customer for their choice of payment method where they pay by consumer debit card, credit card or an electronic payment service such as PayPal. What matters is the payment method rather than who is buying, so a sole trader paying on a personal card is covered by the ban. Where a commercial card is used the ban does not apply, but you may only recover the direct cost to you, not a round number above it.
Domestically it is free to the sender, and it is also the wrong tool for a business. It carries no seller protection, no buyer protection, and using it to take business payments breaches PayPal’s own terms. If you are trading, the commercial rate is the rate.
Two things move the number. Volume normally earns a lower rate, so ask, because published pricing is a starting position rather than a fixed one. The larger saving for anyone selling abroad is usually not the transaction fee at all: it is holding the currency you sell in rather than converting every payment as it lands, which removes the conversion margin instead of negotiating it.
Check if we can help
Tell us what you need. You’ll deal with one team, with the group’s licensed institutions behind it, and get a straight answer either way.