PayPal business fees UK
PayPal charges UK businesses 2.9% + 30p when a customer pays from a PayPal account, but only 1.2% + 30p when they pay by card without one. On £5,000 a month at a £40 average order, that is the difference between £182.50 and £97.50 a month, so how your customers pay matters more than which PayPal product you use.
Fees checked 1 November 2026 on PayPal's UK Merchant Fees page (last updated by PayPal 1 October 2026).
Our verdict
PayPal's card rate is competitive; its PayPal-button rate is not. At 3.65% effective on the house example, paying PayPal by default costs £82.50 a month more than Stripe's £100.00 on the same sales.
Keep the PayPal button if your customers expect it, but offer card checkout alongside it, and if you take over £4,000 a month, ask PayPal for the tiered rate. It is not applied unless you request it.
PayPal merchant fees UK
PayPal calls almost every business payment a commercial transaction: checkout on your website, a paid invoice, a payment link, a PayPal.Me link or a money request for goods or services. These are the domestic rates for a UK account, with a fixed fee of 30p on each GBP payment unless stated.
| How the customer pays | PayPal UK fee |
|---|---|
| With a PayPal account (checkout, invoice, link, PayPal.Me) | 2.9% + 30p |
| By card without a PayPal account | 1.2% + 30p |
| PayPal Pay Later (buy now, pay later) | 3.9% + 30p |
| QR code, £10.01 and above | 1.5% + 10p |
| QR code, £10.00 and below | 2% + 5p |
| International sender, EEA | domestic rate +1.29% |
| International sender, rest of world | domestic rate +1.99% |
| Currency conversion of your balance | 3% above the base exchange rate |
| Dispute fee (standard) | £12.00 |
| Card chargeback fee | £14.00 |
| Withdrawal to a UK bank | No fee |
Source: PayPal UK Merchant Fees page, checked 1 November 2026. Payments between the UK, Guernsey, Jersey and the Isle of Man count as domestic.
PayPal fees on a £5,000 a month shop
The house example: an online shop taking £5,000 a month at an average order of £40, so 125 orders. What PayPal charges depends on how those customers pay.
Every customer pays with a PayPal account
£5,000 × 2.9% = £145.00, plus 125 × 30p = £37.50
£182.50 a month (3.65%)
Every customer pays by card as a guest
£5,000 × 1.2% = £60.00, plus 125 × 30p = £37.50
£97.50 a month (1.95%)
A mixed checkout: 75 PayPal orders, 50 card orders
£109.50 + £39.00
£148.50 a month (2.97%)
All PayPal, on the tiered plan (previous month £5,000, so 2.4% + 30p)
£5,000 × 2.4% = £120.00, plus £37.50
£157.50 a month, saving £25.00 on the standard rate
For reference, Stripe charges 1.5% + 20p on a standard UK card, which on the same 125 orders is £100.00 (see our Stripe review). PayPal's guest card rate is slightly cheaper than that at a £40 order; its PayPal account rate is £82.50 a month dearer.
The PayPal tiered rate plan
Many guides quote 2.9% + 30p as if it were fixed. It is the standard rate, and PayPal publishes a lower one for busier accounts:
| Eligible volume in the previous month | Rate this month |
|---|---|
| £0 to £4,000 | 2.9% + 30p |
| over £4,000 up to £8,000 | 2.4% + 30p |
| over £8,000 | 2.1% + 30p |
The tiered rate plan is optional and only on request: you must contact PayPal and accept updated terms, and each month’s rate is set by the previous calendar month’s eligible volume. It only reduces the PayPal account rate, not the guest card rate, so it is worth asking for once your PayPal-paid volume is regularly above £4,000.
PayPal fee calculator UK
What PayPal takes on common amounts, and what to charge if you want to receive a round figure after fees on a PayPal account payment. The gross-up is (amount + 30p) ÷ (1 − 2.9%).
| Payment | Fee with PayPal account (2.9% + 30p) | Fee by guest card (1.2% + 30p) | Charge this to receive the amount (PayPal account) |
|---|---|---|---|
| £10.00 | £0.59 | £0.42 | £10.61 |
| £40.00 | £1.46 | £0.78 | £41.50 |
| £100.00 | £3.20 | £1.50 | £103.30 |
| £500.00 | £14.80 | £6.30 | £515.24 |
The 30p fixed fee is what hurts on small payments: on a £10 sale it adds 3% on its own. For payments under £10 in person, PayPal's QR code rate of 2% + 5p is cheaper, at £0.25 on £10.
PayPal invoicing fees
PayPal charges no monthly or setup fee for invoicing; you pay only when an invoice is paid. An invoice paid through PayPal is charged as a commercial transaction, so the customer's choice decides the fee: a £500 invoice costs £14.80 if they pay from a PayPal account and £6.30 if they pay by card. On larger business-to-business invoices, a bank transfer avoids PayPal's fee altogether, so put your bank details on the invoice as well as the PayPal button.
PayPal payment link and PayPal.Me fees
A PayPal payment link (created in your business account or in the PayPal Point of Sale app) and a PayPal.Me “pay me” link cost the same as any other commercial payment. Through PayPal Point of Sale, PayPal publishes the link rates separately: 2.9% + 30p when the customer pays with PayPal, 1.2% + 30p for standard credit and debit cards, Apple Pay or other third-party wallets, and 3.9% + 30p for Pay Later. A £40 link costs between £0.78 and £1.46. Our pay by link comparison sets these against Stripe, Square and SumUp.
PayPal for business card payments online
If you want customers to type card details straight into your own checkout, PayPal's Advanced Credit and Debit Card Payments service charges 1.2% + 30p on Visa and Mastercard on blended pricing and 3.5% on American Express, subject to eligibility, application and approval. Taking card details over the phone through PayPal's Virtual Terminal costs 2.9% + a fixed fee, and Virtual Terminal sits under Website Payments Pro, which carries a £20.00 monthly fee. For phone payments, our virtual terminal guide compares cheaper routes.
PayPal in person, through Zettle
PayPal's card reader is the former Zettle, now sold as PayPal Point of Sale. Card payments on the reader cost 1.75% with no fixed fee, so £5,000 a month in person is £87.50, and the first reader is £29 (hardware price checked 25 August 2026). Keyed card entry costs 3.4% + 20p. The reader, its alternatives and how to leave are covered in our Zettle review.
Disputes, chargebacks and refunds
- Dispute fee: £12.00 per dispute (£24.00 for high-volume dispute accounts).
- Card chargeback fee: £14.00, for card chargebacks not processed through a PayPal account or guest checkout.
- Refunds: no fee to make a refund, but the fees you originally paid to receive the payment are not returned.
- Micropayments: 5% + 5p domestic, on application, aimed at businesses taking payments under £5.
When to stop paying PayPal's rate
If PayPal is your only checkout and most customers pay from a PayPal account, you are paying 3.65% on the house example. Adding a card checkout from another provider, or asking for the tiered rate, are both simple fixes. The full comparison of online gateways is in our payment gateways guide, and if you also take card payments in person, send us a statement through our free statement review and we will check what you are paying across both.
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Frequently asked questions
Is a PayPal business account free?
Opening one is, and PayPal lists no monthly or setup fee for its invoicing and payment link tools. The cost is per payment: 2.9% + 30p when a customer pays from a PayPal account and 1.2% + 30p when they pay by card without one. Withdrawing to a UK bank account is free when no currency conversion is involved.
How much does PayPal take from £100?
£3.20 if the customer pays with PayPal (2.9% + 30p), leaving £96.80. If they pay by card as a guest it is £1.50, leaving £98.50.
Does PayPal charge for invoices?
There is no separate invoicing fee: an invoice is a commercial transaction on PayPal's fee page, so a paid invoice costs 2.9% + 30p if the customer pays with PayPal, or 1.2% + 30p if they pay by card without a PayPal account. A £500 invoice therefore costs £14.80 or £6.30.
What is the PayPal fee for international payments?
The domestic rate plus 1.29% for a sender in the EEA, or 1.99% for anywhere else. A £40 order from an EEA customer paying with PayPal costs £1.98. Converting a foreign currency balance costs 3% above the base exchange rate.
Can I get lower PayPal fees?
Yes, if you ask. PayPal's tiered rate plan drops the 2.9% + 30p rate to 2.4% + 30p once the previous month's eligible volume passes £4,000, and to 2.1% + 30p above £8,000. The tiered rate plan is optional and only on request: you must contact PayPal and accept updated terms, and each month’s rate is set by the previous calendar month’s eligible volume.
Does PayPal refund its fee when I refund a customer?
No. No fee to make a refund, but the fees you originally paid to receive the payment are not returned. Refunding a £40 PayPal order still costs you £1.46.