PayPal Business Fees for UK Sellers
Understand PayPal’s different commercial payment categories, optional tiered pricing and the costs to check before changing your checkout.
The short answer
There is no single PayPal business rate covering every way to receive money. Identify the payment product and transaction category first. Compare your confirmed tariff, including the fixed fee, international charges where applicable and any platform costs. Do not assume a lower advertised category or volume tier automatically applies to your account.
In this guide
Start with the correct payment category
| Domestic commercial category | Published GBP rate |
|---|---|
| All other commercial transactions | 2.9% + 30p |
| Card-funded payment under the terms for payments without a PayPal account | 1.2% + 30p |
| Buy Now Pay Later transactions, excluding PayPal Credit | 3.9% + 30p |
PayPal also publishes separate terms for online card services. Ask which product and agreement your integration uses before applying any of these numbers. Receiving a card-funded payment does not mean every card service has the second row’s price.
Check whether tiered pricing has been approved
PayPal lists an optional domestic tiered plan: 2.9% up to £4,000, 2.4% above £4,000 through £8,000, and 2.1% above £8,000, plus the fixed fee. Eligibility is based on the previous month’s eligible volume. Enrolment requires PayPal confirmation; the standard rate continues until then.
Put the confirmed arrangement beside your actual statement. Check which receipts count towards the threshold and what happens after a quieter month. If trading is seasonal, use the seasonal calculator with each month’s complete cost total. Work out any volume thresholds or eligibility changes separately before entering those totals.
Worked example: standard pricing and an approved tier
Fictional stable trading profile using the published tariffs. Assume £10,000 across 250 domestic GBP payments, all in the eligible commercial category. For the lower-tier scenario, assume enrolment is confirmed and the previous month’s eligible volume was above £8,000.
| Component | Standard 2.9% | Approved 2.1% tier |
|---|---|---|
| Percentage charge | £290 | £210 |
| 250 fixed fees of 30p | £75 | £75 |
| Monthly processing | £365 | £285 |
The difference is £80 a month, or £960 across twelve identical eligible months. This does not establish that your account qualifies. Use it to frame a pricing enquiry and replace the assumptions with written confirmation.
Check overseas sales, refunds and platform charges
The UK merchant schedule adds international charges in applicable cases. Keep currency conversion separate from the international transaction classification. Confirm the funding method, sender market and settlement currency instead of treating every GBP receipt as a domestic sale.
PayPal’s commercial refund rule retains the original receiving fees. Reconcile gross receipts, customer refunds and fees separately. For a fuller explanation, read how refunds affect payment costs.
Ask your website supplier whether it adds a payment charge. If you use Shopify, review the Shopify payment-provider comparison before applying a blanket platform percentage. The relevant exemptions matter.
Decide what to retain and what to compare
Review PayPal orders alongside other checkout methods. A method may be useful to customers even if its processing price is higher. Measure completed orders, contribution after variable costs and support workload before removing a choice. Do not count sales moved from another button as additional revenue.
Use the calculator for a clearly defined monthly scenario with the confirmed online rate, count and fixed charges. Model tier changes separately. Our Stripe vs PayPal guide compares a specified sales profile and explains why the processing difference alone cannot predict the effect on sales.
Common questions
Do PayPal’s lower volume rates apply automatically?
No. The published optional tiered plan requires confirmed enrolment and uses the previous month’s eligible volume. Check the agreement and account status before budgeting the lower rate.
Should I remove PayPal if another method has lower fees?
Compare total costs and customer behaviour first. A change can move existing orders, lose orders or add orders. Only genuinely additional contribution should be used to justify additional payment costs.
Put your own figures to work.
Use the free calculator to organise your costs and keep a report. If something is unclear, you can ask for a free initial review.
No registration required. Calculator entries stay in your open browser page unless you choose to share a report in a review request.
Sources and how to use this guide
Primary references checked on 15 October 2026:
- PayPal: UK merchant fees, payment categories and optional tiered plan
- Shopify: third-party fee rules, exemptions and calculation
Trading profiles and any explicitly invented quotes or allowances are fictional. Published provider tariffs are identified and dated; they are not personalised quotations. Worked totals include only the stated components and tax assumptions. They are not customer results or market averages. Provider prices, eligibility and terms can change. Check your written agreement before deciding.
Our guides explain costs and comparison methods. They do not rank the whole market or claim hands-on product testing. Source links are references, not a claim of partnership. Read the calculation method and limitations, or about the service.
Researching other options? Browse the payment and EPOS provider directory for provider profiles, official sources and questions to include in your quotation brief.