PayPal is one of the most well-known e-wallets globally. Many freelancers use it to send and receive money, but one persistent issue is PayPal fees. These fees can make the sender pay extra, and sometimes the recipient doesn’t know how much they will receive.
Additionally, the exchange rate is never clear and is always the lowest in the market. On top of that, PayPal fees in Mexico include conversion costs plus VAT.
Understanding how it works is challenging, and there isn’t a PayPal fee calculator to clarify the situation.
That’s why we’ve prepared this article. Here, we explain all the PayPal fees for receiving and sending money. We’ll see how much is deducted from a personal account and how much for transactions considered commercial.
When sending or receiving money, inside or outside Mexico, PayPal charges various fees. To help you know what to expect, we detail them below:
PayPal charges fees depending on the type of account you have and the transactions you make with them. Let’s explain:
There are no fees for sending money between peers, i.e., to friends or family on PayPal, as long as you use the same currency. If the transfer requires currency conversion, for example, from MXN to USD, PayPal charges a 3.5% fee on its base exchange rate plus VAT.
Now, if you send payments in a currency other than Mexican pesos, the PayPal fee in Mexico is 4% plus VAT. These fees are always based on the base exchange rate.
Here’s an example:
Imagine you want to send money to the United States, about 100 USD. Since it’s another currency, the fee is 4% on the PayPal exchange rate at that time. Suppose it is 17.80 per dollar, then 100 dollars would be $1,780 MXN. Applying the 4% fee would be $71.20 MXN plus VAT (16%). So, the fee would be $82.60 MXN. Finally, the person will receive the payment with 4.5 USD less, which means 95.5 USD.
If you have a business account, PayPal Mexico charges more fees for sending money. Whether you sell services or products, the fee is 3.95% plus a fixed amount that varies depending on the currency. If it’s in the national currency (MXN), that fee is 4 MXN.
Now, if the transaction you want to make is international, extra fees apply. In total, it would be 3.95% plus the fixed fee according to the currency, adding 3.5% for currency conversion plus VAT and an extra charge of 0.5%.
Here’s an example to make it clearer:
If you have a business account in PayPal Mexico and wish to send 100 USD to a client abroad, the fees are calculated as follows:
1. PayPal fees for commercial transactions: 3.95% plus a fixed fee of 0.30 USD.
2. Additionally, a 3.5% fee for currency conversion, 16% VAT on this fee, and an extra 0.5% charge.
In total, sending 100 USD would incur an 8.57 USD fee. This means the client will receive 91.43 USD. Therefore, you need to send more money if you want the recipient to receive the full amount. That’s why many people look for a PayPal fee calculator in Mexico.
Fees PayPal in Mexico for receiving money also vary depending on the type of account. Additionally, the currency in which you receive the money and the amount are considered. Let’s see the details:
For receiving money from other personal accounts, PayPal doesn’t charge any fee. The situation changes if you need to receive money from another country because the platform applies a 3.5% fee on the exchange rate plus VAT. This means if someone sends you money from the United States, PayPal deducts these fees.
Here’s an example:
If a friend or family member in the USA sends you 1,000 USD to Mexico, and the base exchange rate is $17.80 MXN per dollar, you should receive $17,800 MXN.
However, you need to subtract $623 MXN (3.5% on the base rate) + $99.68 MXN (16% VAT on the fee). So, the total fee is $722.68 MXN, and you will receive $17,077.32 MXN.
If you’re a freelancer and opened a business account, then PayPal Mexico will apply commercial rates. This means the fees will depend on the amount received plus a fixed fee according to the currency. If transactions are in pesos, the standard fee is 3.95% + 4 MXN fixed fee.
PayPal considers commercial transactions when you sell your services or products, make or receive donations, and when you request payments.
PayPal Fee Table in Mexico for Businesses:
Total Received in the Month | Fee |
$50,000 MXN to $249,999.99 MXN | 3.65% + $4 MXN fixed fee |
$250,000.00 to $499,999.99 MXN | 3.45% + $4 MXN fixed fee |
$500,000.00 to $999,999.99 MXN | 3.15% + $4 MXN fixed fee |
From $1,000,000.00 MXN | 2.95% + $4 MXN fixed fee |
To receive money from abroad, fees increase. Besides the fee mentioned above (3.95%), an additional 0.5% plus the fixed fee according to the currency received is added. For example, if you receive from:
United States: fixed rate is 0.30 USD.
Canada: fixed rate is 0.30 CAD.
European Union: fixed rate is 0.30 USD.
That’s why, as a freelancer, you should look for alternatives to PayPal to receive money from your international clients. But let’s continue.
You can make a bank transfer from PayPal to your bank account. For this, you need to link your PayPal account, and the fee for this transaction is 3.5% (if currency conversion is required plus VAT). Additionally, there are two options for withdrawal:
Type of Withdrawal | Fee |
Standard Withdrawal (3 to 5 business days) | No fee in local currency. 3.5% + VAT if there’s currency conversion. |
Instant Withdrawal | $40 MXN. If there’s currency conversion, add 3.5% + VAT. |
Due to the various types of conversions and the unfavorable exchange rate, PayPal is not the best option for Mexican freelancers. In any transaction, you end up receiving less money compared to more modern alternatives.
To avoid the high costs of receiving money from the United States, use DolarApp. If you have clients in the USA, you can use your DolarApp account to receive money without complications and with a very low fixed fee.
We only charge 3 USD from the total received. Whether you receive 100 USD, 1,000 USD, or 10,000 USD, the transaction cost will always be the same. This way, you can better manage your funds with a clear fee and no hidden charges.
Additionally, if you need to convert your money to Mexican pesos, we have a better exchange rate than PayPal. For example, at the time of writing this article, 1 USD = $17.76 MXN. Without additional fees, you just need to subtract 3 USD from your payment and then multiply by the exchange rate.
So; 1,000 USD - 3 USD = 997 USD, then in Mexican pesos it would be $17,706.72 MXN. It’s a significant difference compared to the above example, where a friend sends you 1,000 USD through PayPal.
Another great difference with PayPal is that in DolarApp you can always see the exchange rate, both current and historical.
So, if you want to stop losing money on fees and costs for each transaction, start using DolarApp.
Note: The exchange rate used in this article is as of July 21, 2024.
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