For the longest time, I've been paid without fees, but now I'm seeing fees starting this month. The fee is about 4-5% of the transaction.

  1. Is this new?
  2. For tax purposes, can I report the amount after the fee, since this now lowers my income by about 5%?

To my knowledge paypal has always charged 2.9% + $0.30 on regular transactions. I believe the fee is a little higher if you accept a credit card in person.

You report the full gross income but you also report the fee as a business expense.

  • Interesting, as I never get that income, so I don't see how I can prove the expense. Basically, when I get $500 now, I'm only getting about $475 on my statement and PayPal notifies me by email that it debited $25 in a fee. – StartUpDev May 5 '17 at 21:22
  • 3
    That's the proof. – JTP - Apologise to Monica May 5 '17 at 21:40
  • They didn't at first (when they were venture funded, pre-eBay). But since then, yeah, they charge since the credit card vendors charge... – Aaron D. Marasco May 5 '17 at 21:40
  • @StartUpDev, when I go in to PayPal I can run a report that indicates Gross receipts, fees, and net receipts. I've had a business account since I can remember, perhaps this is a reporting function restricted to business accounts. You are paying a fee to PayPal for performing a service for you, that is a business expense. PayPal sending your proceeds net of fees doesn't negate the existence of the fees. – quid May 5 '17 at 22:02

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