How to Calculate Ebay and PayPal Fees

Image shows a man sitting at . desk at his laptop. There are boxes all around him, and a positive growth line chart behind him. Text reads: "Tips for calculating ebay and paypal fees: always check the relevant ebay and paypal pages for details on current fees; reading through ebay's fee charts carefully can help you to understand how much it will cost you to sell an item; paypal's fees are generally easier to understand and calculate and are always available in current form on the paypal fees page"

Image by Daniel Fishel © The Balance 2020

For first-time sellers on eBay, it's wise to take the time to find out what fees you'll incur from eBay and PayPal before you start selling. There are some basic fees that you'll be charged when you list an item and when you sell it, and those fees can add up and take you by surprise if you're not expecting them. Calculating the fees will help ensure that you make a profit on the items you list.

Listing Insertion Fee

The first fee you'll encounter is an insertion fee, which is the amount you’re charged for listing an item. This fee applies to both auction-style listings and fixed-price listings (also known as Good 'Til Canceled listings that renew automatically once per month). Sellers with a basic eBay account get 100 zero insertion fee listings each month for most categories. After exceeding that allowance, each additional item that you list is subject to a fee of $.30. 

eBay sellers who sign up for a store subscription, which ranges from $4.95 per month to $2999.95 per month, get a greater zero insertion fee allotment and incur less in fees if the established thresholds for their subscription are exceeded. While a basic eBay account is suitable for low-volume sellers just getting started, signing up for a store subscription makes sense once your sales increase.

Final Value Fee

The final value fee is the charge that is applied at the end of a transaction when a sale has been made. It is a percentage based on the purchase price of an item, plus shipping and handling. The shipping fee is based on the shipping method chosen by the buyer, unless the seller has opted for 1-day or domestic shipping, in which case, the fee will be calculated using the cheapest method.

The fee is applied at the time of sale, regardless if the buyer pays for the item or not. If a seller does not receive payment, they can cancel the sale or report the sale as being unpaid, and they will be eligible to receive a credit on their account, rather than a refund.

Sellers with a basic eBay account pay a 10% final value fee for most items (with a $750 maximum), 12% for books, DVDs, movies, and music (with a $750 maximum), 2% for select business and industrial categories (with a $300 maximum), and 3.5% for musical instruments and gear (with a $350 maximum). Sellers who maintain a store subscription are charged lower fees based on their subscription model.

eBay Store Subscription Options
Subscription Type Annual Subscription Fee
(Paid Monthly)
Annual Subscription Fee
(Paid Yearly)
Free Fixed Price Insertions  Free Auctions in Collectibles and Fashion Additional Fixed Price Insertion Fee  Additional Auction Insertion Fee Final Value Fee Maximum Fee
Starter $7.95 $4.95 100 100 $.30 $.30 3.5-12% $750
Basic $27.95 $21.95 250 250 $.25 $.25 3.5-12% $350
Premium $74.95 $59.95 1000 500 $.10 $.15 3.5-12% $350
Anchor $349.95 $299.95 10,000 1,000 $.05 $.10 3.5-12% $250
Enterprise N/A $2999.95 100,000 2,500 $.05 $.10 3.5-12% $250

Optional Listing Upgrade Fees

There are numerous options available to enhance and create additional exposure for your listings in searches.

The optional upgrades include making the listings bold, adding a subtitle, being able to add more pictures (there is no charge for the first dozen photos you post with your listing), using eBay's Listing Designer (which allows you to enhance listing with HTML formatting), setting a reserve price for auction items, getting international listing visibility, and more.

Items listed in two categories are subject to both a fee for insertion and for an optional upgrade in each category (only charged one final value fee is charged). Also, the rules for selling real estate and vehicle listings are altogether different, as are the fees, including for optional listing upgrades.

Optional Listing Upgrades - Auction-style Listings
Optional Listing
Item Starting Price of Up to $150
or Real Estate Listings
Item Starting Price
of More Than $150
1-3-Day Duration $1.00 $1.00
Bold $2.00 $3.00
Gallery Plus* $.35 $.70
List in Two Categories Insertion and optional listing upgrade fees apply for each category. Final value fees are charged once per item, if your item sells.  
Listing Designer $.10 $.20
Subtitle $1.00 ($.50 for Real Estate Listings) $3.00
International Site Visibility $.01-$99
$50 or More
Reserve Price Set a Minimum Price That Must Be Met for Your Item to Sell $5.00 or 7.5% of reserve price, whichever is greater (maximum fee $250) charged whether or not your item sells  
Reserve Price in Select Business and Industrial Categories, including Heavy Equipment, Commercial Printing Presses, Food Trucks, Trailers, and Carts $5  
Optional Listing Upgrades - Fixed-Price Listings
Optional Listing
Item Starting Price of Up to $150 Item Starting Price
of More Than $150
Classified Ad Format or Real Estate Listing
Bold $4.00 $6.00 $4.00
Gallery Plus $1.00 $2.00 $1.00
International Site Visibility $.50 $.50 N/A
Listing Designer $.30 $.60 $.30
Schedule Listing Free Free $.10
Subtitle $1.50 $6.00 $1.50

*Using Gallery Plus is free for listings in collectibles, art, pottery and glass, and antique categories.

Optional Promoted Listings Fee

eBay sellers also have the option of promoting their listings so that their items get greater prominence in search results on eBay and appear in "related items" when buyers are browsing an item being offered by another seller. Promoted listings are available to all sellers whether they have a store subscription or not.

The fee for promoted listings can be set by the seller, based on the ad-rate trends of what other sellers have committed to paying, starting at 1% or more of the final value fee that's assessed. The fees are only collected if a buyer clicks on an ad and then purchases the item advertised within 30 days. There are certain eligibility requirements.

  • Seller performance level must be Above Standard or Top Rated.
  • The listing must include at least two images.
  • Only fixed-price listings can be promoted.
  • Vehicle, Real Estate, and Travel Listings are excluded.
  • The listing must be complete (no "parts, not working" listings).
  • Item cannot be offered for local pick up.

Classified Listing Fees

Listing a classified ad is another option for selling on eBay. Unlike auction-style and fixed-price listings, eBay sends sellers contact information for buyers and allows them to get in touch directly. Although these transactions are conducted outside of eBay's platform, if the contact information is misused, sellers can face restrictions or suspension. Their ability to resolve disputes is limited if a buyer chooses not to pay.

The fee for listing a classified ad is $9.95 for a 30-day listing, and there are no final value fees. Sellers can place classified ads in four different categories:

  • Business & industrial (building materials and supplies, trade show displays, and websites and businesses for sale)
  • Specialty services (artistic services, custom clothing and jewelry, graphic and logo design, home improvement, media editing and duplication, web and computer services)
  • Travel (lodging, luggage, vintage luggage, and travel accessories)
  • Everything else (eBay user tools, funeral and cemetery, information products, reward points, and incentives)

Punitive Fees

There are additional fees that sellers can incur if they don't abide by eBay's rules or they don't meet the minimum best practices established for sellers. If a seller attempts to coordinate a sale with a buyer outside of the confines of eBay by sharing contact information with a buyer, the seller will be charged a final value fee for the transaction, even if no sale has been made.

For auction-style listings, the fee is based on the whichever price is the highest, the starting auction price, the Buy It Now price, or the price negotiated by the buyer and seller. The final value fee for fixed-price listings will be assessed based on the fixed price or the price negotiated by the buyer and seller.

Payment Processing Fees: eBay Managed Payments

eBay is moving toward a managed payment system for sellers, in which they can offer different payment options and consolidate all of their payment processing in one place. The company hopes to have most sellers transitioned over by the end of 2020.

As of June 2020, however, the managed payments option is only available to a select group of sellers who received invitations. Sellers can express interest in enrollment, and eBay will notify them when and if they become eligible.

There are several advantages to using Managed Payments on eBay, as the service has been branded. Sellers can accept a wider variety of payment methods, including Apple Pay, Google Pay, credit, debit, and gift cards, in addition to continuing to accept payments via PayPal, which is the current standard. Sellers can also set up automatic transfers to their bank when a buyer submits payment, rather than having to manually arrange for a transfer through PayPal, which means avoiding fees changed by that third-party vendor.

The fees for Managed Payments on eBay are straightforward. Sellers who were enrolled by June 4, 2019, pay a final transaction fee of 2.7%, which includes shipping and handling, plus a payment processing fee of $.25 per item sold. The other applicable fee that can be applied is $20 if a dispute arises between the buyer and seller, and the latter is deemed to be the responsible party.

Payment Processing Fees: PayPal

PayPal is currently the standard for payment processing on eBay, and its fee structure is also straightforward. The company charges a 2.9% processing fee in addition to a set rate of $.30 for each eBay sales transaction.

To transfer payments from PayPal to their bank, sellers need to provide banking information. Although there is no fee for basic transfers, which take two to three days, if a seller prefers immediate access to funds, PayPal charges a 1% fee for instant transfers.

If the sale is from an international buyer, the percentage collected is 4.4%, and the set rate is based on the currency the buyer pays with. PayPal doesn't charge a fee to sign up for or maintain an account, and all major credit cards are accepted.

If a seller primarily deals with lower purchase price items, there is another option available for them to reduce their fees. Micropayments are geared to sellers who typically sell items for less than $12. The fee structure for this option charges a greater rate percentage-wise (5%) but has a lower flat-rate fee of $.05 per domestic transaction, and 6% plus a set rate based on a buyer's currency for international sales.

High-volume sellers also have an option to lower their fees by applying for PayPal's merchant rate, which is available to sellers who sell $3,000 worth of merchandise per month.

Fee Calculators

There are numerous third-party rate calculators you can use to estimate all the fees associated with eBay. There are some that calculate the eBay and PayPal fees, some that estimate how much profit you can make after fees are deducted, some that offer simple spreadsheet breakdowns, and still others that are available in app form for Android users.

Article Sources

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