How to Use This Tool
- Enter Your Amount: Input the gross payment you'll receive or the net amount you want to walk away with.
- Select Platform & Options: Choose between Stripe or PayPal, then customize with location, payment type, and optional features that apply to your situation.
- Toggle Reverse Mode: Switch to "Invoice Mode" to calculate exactly what to charge your client so you receive your desired net income after all platform fees.
Understanding Platform Processing Fees
Stripe Transaction Fees
Stripe is a popular payment processor for global freelancers. Their standard domestic rate is 2.9% + $0.30 per transaction. If you're accepting international payments, Stripe adds an additional 1.5% currency conversion fee. For businesses using Stripe's invoicing feature directly, there's an extra 0.4% fee on top of the base processing rate. This tiered approach allows freelancers to understand exactly what they'll pay based on their business model.
PayPal Transaction Fees
PayPal offers multiple payment acceptance methods with varying fee structures. The PayPal Checkout and Invoices tier charges 3.49% + $0.49 per transaction, making it one of the pricier options but popular for its accessibility. The Standard Card rate is 2.99% + $0.49, offering a middle ground. For sellers primarily using the "Goods and Services" category (typically for digital services and project work), PayPal charges a flat 2.99% with no additional per-transaction fee. International cross-border payments add an extra 1.50% to any of these tiers.
Cost Comparison
For a $1,000 payment, Stripe's domestic rate costs approximately $32.90, while PayPal's checkout option costs around $34.90. On larger transactions, these percentage-based fees compound significantly. Using Reverse Invoice Mode helps you pass these exact costs to clients while maintaining your target profit margin.
The Reverse Invoice Formula
The "Invoice Mode" uses sophisticated reverse calculation mathematics to ensure you receive your exact target net amount after all platform fees are deducted. Here's the mathematical logic:
Standard Calculation (What you earn from a gross payment):
Fee = (Gross × Percentage) + FixedFee
Net = Gross − Fee
Reverse Calculation (What to invoice to keep a target net):
Gross = (TargetNet + FixedFee) / (1 − TotalPercentageAsDecimal)
For example, if you want to net $1,000 from a PayPal transaction with a 3.49% + $0.49 fee structure, the calculator isolates the Gross variable to determine you need to invoice $1,036.27. This ensures that after PayPal deducts $36.27 in fees, you're left with exactly $1,000.
Frequently Asked Questions
1. What is the cheapest way to accept freelance payments?
Stripe's domestic rate (2.9% + $0.30) is typically the cheapest for US-based freelancers. If you're in the Goods & Services category on PayPal, their flat 2.99% can be competitive, though you must verify you're eligible for that tier. For international payments, both platforms add currency conversion premiums, so comparing specific rates based on your location is essential. This calculator helps you see exact costs for your situation.
2. Who pays the Stripe (or PayPal) transaction fee—the client or the freelancer?
Platform transaction fees are deducted from the freelancer's received amount by default. If you wish to pass the fee entirely to your client (ensuring you receive the full invoice amount), use the Reverse Invoice Mode to calculate what to charge. This shifts the cost burden to the client while ensuring your exact target payment. Many contracts explicitly state whether fees are buyer or seller responsibility, so communicate clearly with clients.
3. How do international currency conversions impact final payout numbers?
Currency conversion fees typically range from 1% to 2% depending on the platform and currency pair. Stripe charges 1% for international conversions, while PayPal's cross-border rate is 1.50%. These fees apply on top of the base transaction percentage, compounding your total cost. For a $1,000 international PayPal payment, you'd pay 3.49% (PayPal) + 1.50% (cross-border) + $0.49 = approximately $50.40 total, leaving you with $949.60. Always account for these in your invoicing strategy.
4. Can I adjust fees based on my contract terms with clients?
Absolutely. Some freelancers negotiate with clients to split transaction fees, while others build them entirely into their rates. Use this calculator in "Invoice Mode" to determine various cost scenarios. You might invoice different rates to different clients based on whether you're absorbing fees, passing them on, or splitting them. Always document fee arrangements in your contracts to prevent disputes.