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Paypal fee of 2.9% is applied on the taxes of sold item?

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New Community Member

Paypal fee of 2.9% is applied on the taxes of sold item?

I recently sold an item on eBay, and when i checked the money I had received on paypal it was a few dollars  less than I was expecting. And when I made the calculations I noticed that the person paid taxes and eBay retained the amount, but paypal has charged the 2.9% off the total amount the customer paid ( including the tax), not what I received ( amount sold + shipping). That is not right.

1 REPLY 1
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Esteemed Advisor

Re: Paypal fee of 2.9% is applied on the taxes of sold item?

@bileme 

 

Yes, PayPal does that. Its industry standard that payment processing fees include sales tax. It does not get parsed out. Its just that internet sales tax at marketplaces is a recent 'thing' and micro businesses and private/diy sellers are not used to it and think its wrong/illegal when it really isn't. Processing fees are calculated on the entire amount processed (item price, s/h, and sales tax).

 

https://www.cardfellow.com/blog/dont-lose-money-from-processing-fees-sales-tax/


Kudos & Solved are greatly appreciated. 🙂