Note the info below is based on US Accounts. CA accounts are little different as you don't have as many shippng method options to choose from.
With PayPal's Payments Standard, "Zip Codes" are only used for applying Sales Tax. You can't use them to setup a shipping method. When you setup your Tax Table Calculations, it's first done by State, then if you need to apply different Tax Rates say for example a Town and/or County plus the State rate, you use Zip Codes to drill down to that level which then allows you to include the correct rates you need. (As each State has different rules for collecting Taxes, you have to check with your State's Department of Revenue before setting up your Tax Table Calculations.)
With Payments Standard, you can setup various "shipping" methods which you can base on a "flat rate or total amount", a "percentage of total amount", "total number of item" or "total weight". There's also the shipping overide variables which can be used in your item button code to cover unique shipping conditions, i.e., cost of the first item to ship is $5.00, each additional item may cost $1.00.
If you want to include Zip Codes for shipping, then you need to consider using a 3rd party shopping cart. Most carts are more flexible when it comes to specific shipping features and functions as they rely on a built in backend database. Some carts even have links to the major shipping services to help calculate the costs.
This User Guide explains more in detail:
https://www.paypalobjects.com/webstatic/en_US/developer/docs/pdf/pp_websitepaymentsstandard_integrat...
