How to Calculate PayPal Fees
PayPal standard invoicing and seller fees are typically calculated as a percentage of the total transaction amount plus a fixed transaction fee. When you request payments from clients, these processing charges are subtracted from the received total, meaning your final payout is lower than your invoiced fee.
To receive your desired net payout, you must factor in these percentages in reverse. Because the merchant fee is calculated based on the gross invoice amount, simple addition is mathematically incorrect and will leave you short. You must utilize the reverse fee calculation equation instead.
The reverse calculation formula is: Gross = (Net + Fixed Fee) / (1 - Percentage Fee)
For example, if you aim to clear exactly $100.00 USD under standard US PayPal invoicing rates (3.49% + $0.49 fixed fee), the math is: ($100.00 + $0.49) / (1 - 0.0349) = $100.49 / 0.9651 = $104.12. By charging your client $104.12, PayPal will deduct a fee of $4.12 ($3.63 + $0.49), resulting in a net take-home of exactly $100.00.