How to receive money on PayPal with or without fees

PayPal is arguably the most popular online payment processing option available today. As one of the pioneers in that category, it would be somewhat surprising to find someone who has not heard about them.  

Whether you're receiving payment for your goods and services, or just sending money to friends and family, PayPal makes the cross-border transfer of funds easy— and in an assortment of currencies.

Nevertheless, understanding PayPal fees structure can be a little tricky, sometimes resulting in unexpected losses.

In this article, we'll explore how to receive money on PayPal with or without fees, so that you can make the most of this popular payment platform in your freelance business or other areas.

If you are interested in other banking systems for freelancers, take a look at this article.

How to Receive Money with Fees: the PayPal fees explained

There are two major categories of users on PayPal, merchants selling goods and services and personal users. The platform's fee structure considers this.

Additionally, It's important to note that their fees can vary by country and currency, which they may periodically update, so it's always best to check PayPal's website for the most authentic and updated information on fees.

Selling goods and services

For merchants using PayPal as a payment processor for selling their goods and services, the platform charges a fee of 2.9% of the transaction amount plus a fixed fee based on the currency received. The fixed fee is usually around $0.30 per transaction but varies depending on the currency.

For instance, in the US, the fee is 2.9% + $0.30 per transaction, while in the UK, the fee is 2.9% + £0.30 per transaction.

So, if you sell an item for $1000, the PayPal fee would be $2.90 + $0.30, for a total fee of $3.20.

Discounted transactions

PayPal offers discounted transaction fees for merchants with higher sales volumes. The more you sell, the lower your transaction fees will be. This is intended to encourage top merchants who have to process a lot of money and could quickly rake up a lot in terms of fees.

For instance,

  • If you sell between $0 and $3,000 per month, your transaction fee will be 2.9% + $0.30 per transaction.
  • If you sell over $100,000 per month, your transaction fee will be 2.2% + $0.30 per transaction.

PayPal sometimes charges additional fees for currency conversions, refunds and chargebacks. For instance, if your customer disputes a transaction and you receive a chargeback, PayPal may charge a fee of $20 per chargeback.

If you receive money in a currency that is not your primary currency, PayPal will automatically convert the payment to your primary currency at a rate that includes a currency conversion fee. The currency conversion fee varies depending on the currency but is generally around 2.5% of the transaction amount.

How to Receive Money on PayPal Without Fees: Personal transactions

One way to receive money from PayPal without fees is to use what they call the "Friends and Family" option. This option is designed for non-commercial transactions, such as sending money to a friend or family member. When you use the "Friends and Family" option, PayPal doesn't deduct fees for the transaction, which means you'll receive the full amount of the payment.

However, there is an exception—  if you use a debit or credit card to fund the transaction, PayPal still charges their standard fee of 2.9% + a fixed fee based on the currency.

Also, it's important to note that using the "Friends and Family" option has its peculiar risks that are worth considering. Since this option is designed for non-commercial transactions, there's no purchase protection or dispute resolution available.

What this means is that, if something goes wrong with the transaction, you won't be able to file a claim with PayPal to get a refund. Additionally, using the "Friends and Family" option for commercial transactions is against PayPal's terms of service, this can result in your account being limited or worse, even suspended.

Tips on how to avoid PayPal fees

If you're looking to reduce PayPal fees, there are several tips and tricks you can use. Here are a few of them:

  • You can avoid some of the transaction fees associated with credit cards by linking a bank account or debit card to your PayPal account.
  • Choosing the right currency conversion option can help you save money on exchange rates.
  • Requesting payment in the correct currency can help you avoid additional currency conversion fees.

How to use PayPal to receive money: setting up an account

To receive money you need to first set up an account. Setting up a PayPal account is a short and easy process that can be completed in just six few steps. Here's how to do it:

  • Step 1: Go to the PayPal website and click the "Sign Up" button in the top right corner.
  • Step 2: Select the type of PayPal account you want to create: either "Personal" or "Business". Click the "Next" button.
  • Step 3: Provide your name, address, email address and password in the form provided.
  • Step 4: Verify your email address by clicking on the link that PayPal sends to your email inbox.
  • Step 5: Link a payment method to your account. You can link a credit or debit card, a bank account, or both.
  • Step 6: Once your payment method is linked, you can start using your PayPal account to send and receive payments.

Some things to note when setting up your PayPal account:

  • The name and address you use to register your account must match the information on your payment method.
  • If you're creating a business account, you'll also need to provide additional information or documents about your business, such as your tax ID number.
  • Depending on location and other factors, PayPal may require additional verification steps, such as providing a copy of your ID or proof of address.

Overall, creating a PayPal account is a straightforward process that you can complete in just a few minutes. Once your account is set up, you can start using PayPal to make and receive payments online— whether you're shopping online, sending money to friends and family, or running a business.

Receiving money

To receive money with PayPal, follow these steps:

  • Step 1: Sign in to your PayPal account and click on the "Money" tab at the top of the page.
  • Step 2: Under "Money", select "Request Money".
  • Step 3: Enter the email address or mobile phone number of the person or business that you're requesting money from, also include the amount you're requesting and the currency.
  • Step 4: Add a note to the request if necessary, and then click the "Request Money" button.
  • Step 5: Your recipient will receive an email or notification letting them know that you've requested money from them. They can then log in to their own PayPal account and send the payment once they've received the request.
  • Step 6: You'll receive a notification in your PayPal account letting you know that you've received money once the payment is sent.

PayPal for freelancers and merchants

If you're receiving money for goods or services that you've sold, you can also send an invoice to the buyer using PayPal's invoicing tool, in fact, this is one of the best invoicing apps for freelancers. It allows you to create, customise and send professional-looking invoices that can be paid directly through PayPal.

  • To create an invoice, go to the "Tools" tab in your PayPal account and select "Invoicing". From there, you can create a new invoice and customize it with your business info, e.g, logo, description of services, payment terms, and more. After sending the invoice, you can track its status and receive payment notifications in your PayPal account.

PayPal is a secure and reliable way to receive payments online. By following these basic steps, you can quickly and easily receive money and simplify your payment process.


Knowing how to receive money in PayPal with or without fees is important for freelancers or other businesses using the popular payment platform. By using the "Friends and Family" option, or following the simple tips for reducing fees that we mentioned, you can make the most of your PayPal account and avoid unexpected costs. However, it's important to use PayPal responsibly and follow its terms of service, to ensure a safe and secure experience