Paypal Australia Account Fees

Updated 4 January 2021
Is PayPal the best option for taking payments for your products or services online?  Let us tell you everything you need to know in this article, and save you the hassle of hours of research.  
You want the cheapest and easiest platform, with minimum hassle, so here is the complete run-down of everything you need to know before choosing PayPal as your e-commerce solution in an informative and easy-to-understand article.
​PayPal is Australia's most popular platform for Australia and international customers to pay into your Australia bank account. However, the fees PayPal charge vary greatly depending on the nature of the transaction.  Some of the fees aren't transparent, so using real transactions, we've distilled the detail. 
Popular questions answered in this page: 
  1. How much of my profit will be eaten in PayPal fees?
  2. How long does it take for my PayPal balance to transfer to my bank account?
  3. Will I be charged by PayPal to send money to my friends and family, and how much?
  4. How does overseas selling work, and what are the fees?
  5. Should I price my goods or services in AUD or USD, or something else?
  6. Can I avoid PayPal fees but still use their service?
  7. How I do use PayPal to get quicker payments?
  8. Can I spend PayPal balances online, and if so, where are they accepted?​

What Do You Want To Do?

1. PayPal Fees - Sending Money to Friends/Family in Australia

With two simply clicks, PayPal lets an account holder send money to any other PayPal account holder in Australia or around the world. There are two ways to do it, each with differing levels of fees. 
Option 1 - Use Your PayPal Balance - Free
If you have a PayPal balance in excess of the amount of dollars you want to send, making personal payments to friends and family is free for you and the recipient (i.e. your friend/family member) in Australia when you use your PayPal balance. If you need to partially fund (i.e. top up) the balance via credit or debit card, then fees will be charged. 

Option 2 -  Use a Credit or Debit Card - 2.4% + $0.30 AUD per transaction
If you are sending or receiving a personal payments using a credit or debit card, PayPal charges 2.4% + $0.45 AUD per transaction. 
Fees: Paying for goods or services
Please note that if you are "paying for goods or services", and choose this option, there are NO transaction charges or fees paid by the buyer - the seller (recipient of funds) is deducted the standard PayPal fees. 

2. PayPal Fees - Receiving Money from Australia Transactions

  1. Transaction fee (i.e. customer pays you via your website)
  2. Bank Transfer fee (i.e. when you withdraw the funds from your PayPal account into you Australia bank account)
  3. Australia Bank Deposit fee (what your bank charges you to receive the PayPal money in your account)
1. Transaction fee 
  • PayPal charges a standard 3.4% + $0.45 AUD per transaction.  
  • If you are a business that would receive more than AU$5,000 per month via PayPal, the percentage fee per transaction reduces accordingly:
  • Up to $5,000 - 3.4% plus $0.45 AUD
  • $5,000.01 – $15,000 AUD - 2.9% plus $0.45 AUD
  • $15,000.01 - $150,000 AUD - 2.7% plus $0.45
  • $150,000.00 AUD and over - 2.4% plus $0.45 AUD

2. Bank Transfer fee
  • AU$1.00 for amounts below AU$150
  • Free for amounts above AU$150

3. Australian Bank Deposit fee
  • As at February 2019, no Australian bank was charging for inbound PayPal deposits, nor had plans to do so.
  • Delivery time ranged from same-day to up to 7 days.
  • Of the PayPal account holders we spoke to, over 75% received funds in one to two business following a withdraw request. 
Examples of Fees:
1. Item sold for AU$100 
Transaction fee: 3.4% + $0.45 = AU$3.40 + AU$0.45 = $3.85. Balance remaining in PayPal account = AU$96.15
Bank Transfer fee: AU$1.00 as because AU$96.15 falls below the AU$150 threshold for free transfers.  

Balance remaining in PayPal account = AU$95.15

Total PayPal Fees: AU$4.85, or 4.85% of the transaction value

2. Item sold for AU$25 
Transaction fee: 3.4% + $0.45 = AU$0.85 + AU$0.45 = $1.30. Balance remaining in PayPal account = AU$23.70
Bank Transfer fee: AU$1.00 as because AU$23.70 falls below the AU$150 threshold for free transfers.  

Balance remaining in PayPal account = AU$22.70
Total PayPal Fees: AU$2.30, or 9.2% of the transaction value

Conclusion and Recommendations:
  • ​PayPal fees, as a percentage of the sale value, fall significantly the greater value of the transaction.
  • We believe fees of around 4-5% are acceptable for a solution with no ongoing monthly/annual fees or setup costs. 
  • To minimize fees, it is best to wait for your PayPal balance to reach AU$150 before withdrawing any balances to avoid the AU$1.00 fee.
  • Your fees will not change if your customer pays with a foreign currency card (i.e. uses an Australian or American credit card, as the value of the good/service is priced in Australian Dollars). 

3. PayPal Fees - Receiving Money from International Transactions

Fees - International Transactions
  1. Transaction fee (i.e. customer pays you via your website)
  2. Foreign exchange fee (i.e. currency conversion from foreign currency to Australia Dollars?
  3. Bank Transfer fee (i.e. when you withdraw the funds from your PayPal account into you Australia bank account)
  4. Australia Bank Deposit fee (what your bank charges you to receive the PayPal money in your account)
1. Transaction fee 
PayPal charges a standard 3.9% per transaction, plus a "fixed fee based on the currency received". We make the assumption that Australian-based PayPal account holders will want to use the platform to "sell on website, through invoice or email payments overseas" and thus this fee base applies. The "fixed fee based on the currency received" refers to the Foreign Exchange fee outlined below. 

2. Foreign Exchange fee
PayPal charges 2.5% on the transaction value for any item priced and sold in a foreign currency. Per PayPal; "If your transaction involves a currency conversion, it will be completed at a retail foreign exchange rate quoted to PayPal by an international financial institution....this exchange rate includes a 2.5% fee above the wholesale exchange rate at which PayPal obtains foreign currency, and the fee is retained by PayPal. The specific exchange rate that applies to your multiple currency transaction will be displayed at the time of the transaction". 

What does this mean?
  • Basically PayPal uses a market forex rate for converting your transaction currency (i.e. US Dollars) to Australian Dollars, and then adds a fee of 2.5% of the transaction value for doing this. So, whatever you sell, you'll lose 2.5% on foreign exchange fees. 

3. Bank Transfer fee
$1.00 for amounts below AU$150
Free for amounts above AU$150

4. Australian Bank Deposit fee
  • As at March 2019, no Australian bank was charging for inbound PayPal deposits, nor had plans to do so.
  • Delivery time ranged from same-day to up to 7 days.
  • Of the PayPal account holders we spoke to, over 75% received funds in one to two business days following a withdraw request. 

Example:
1. Item sold for AU$299.50, transacted back to Australian Dollars.
Transaction fee: 3.9% = AU$11.98 (this actually computes to 4.00% (two decimal places, and we have PayPal for comment). Balance remaining = AU$287.52 

Foreign Exchange fee: 2.5% of AU$ = AU$7.18 (closest estimate)  - PayPal claims to use the "most current exchange rate data", applying a 2.5% fee on top of their "rate data". 

Bank Transfer fee: $0.00, as the balance is above the AU$150 threshold for free transfers.  

Total PayPal Fees = AU$11.98 + AU$7.18 =AU$19.16 and as a % Fee = AU$19.16 / AU$299.50 = 6.4% 

4. ​PayPal Fees - Sending Money to Friends/Family Internationally

With two simply clicks, PayPal lets an account holder send money to any other PayPal account holder around the world. 
There are options options for making a transaction:
  1. Payment for "Goods and Services" (free, see "Fees: Paying for goods or services" below. 
  2. Sending money to "Family and Friends". 

Each has a differing levels of fees:
  • 1% of total transfer - available if you use your PayPal balance and/or a bank account.
  • 3.9% + "0.45" of the notional currency being sent, i.e USD0.45, EUR0.45, AUD0.45 (if you pay using your credit or debit card). Your fee will be charged in the currency you are sending, and usually averages around 4%
​Fees: Paying for goods or services
Please note that if you are "paying for goods or services" there are NO transaction charges or fees paid by the buyer, even if the money is sent in a foreign currency - the seller (recipient of funds) is deducted the standard PayPal fees. 

Conclusion and Recommendations:
  • ​Sending money overseas via PayPal incurs fees for the sender, and the recipient (approx 3.4% of the received balance) so a payment of $100 can see about 7.5% evaporate in fees. 
  • We recommend using your PayPal balance or bank balance to make any overseas foreign currency transactions to avoid fee spikes. 

5. Merchant Integration - Making Getting Paid via PayPal EASIER 

  • Accounting Software
Xero - Xero makes it seamless to receive payment with a clever "Pay Online Now" link attached to every electronic invoice you send your customers! Further to that, your Xero dashboard displays a live feed. 
MYOB - MYOB makes it less easy in comparison, with no live feed and a manual process to reconcile. Yikes.  
  • ​eCommerce Platforms
Shopify - PayPal is 1 of over 70 options available to Shopify store owners, making it easy and fast to receive payment. 
Weebly eCommerce and Wix eCommerce, popular DIY website builders, integrate to PayPal 
Etsy - PayPal is accepted as a payment method

In Your Store with Contactless Payment (new to Australia)
PayPal Here - PayPal's contactless payment device.

Three IMPORTANT Facts to Know About PayPay

  • PayPal vs "another provider" (such as DPS, WorldPay, Stripe etc) varies on a number of factors Currency (do you need single currency, or multiple currency?), Integration (are you looking for a custom billing system with online payments, or simply wanting to be paid via Xero invoices or on your website?) and Volume (are you expecting a turnover of millions, or one-off transactions?). 
  • Need to refund a payment? PayPal makes is ONE CLICK easy - compare that to the costs and time spent making bank transfers locally and overseas!
  • As a rule, the higher the value of the transaction, the lower the "percentage of PayPal fee as total purchase" charged.

Stores and Service Providers Now Accepting PayPal

  • Beyond transferring PayPal money to your bank account, PayPal has recently added a number of trusted Australia retail and service providers that accept payment via PayPal.
  • Brands include Qatar Airways, Spotify, Country Road, Bendon and Quicksilver.
  • You can check out the full PayPal retailer list which is peridiocally updated as new.