When you are a freelancer, the price you quote your client is rarely the amount that lands in your bank account. Between platform fees, payment gateway fees, and currency conversion, your profit margin shrinks fast.
If you are not accounting for these fees, you are working for less than you think. Let us break down exactly what Stripe and PayPal charge, how ACH transfers differ, and how to use our Fee Calculator to set your rates properly.
1. Stripe Fees
Stripe is the industry standard for online card payments. It is incredibly reliable, but the fees add up. For standard online transactions, Stripe typically charges 2.9% + $0.30 per successful charge.
If you are selling internationally, add an extra 1.5% for currency conversion. If a client disputes a charge (a chargeback), Stripe charges a flat $15 penalty, which comes directly out of your pocket. This is why for small invoices, Stripe can eat a massive chunk of your profit.
2. PayPal Fees
PayPal is often preferred by international clients, but it is notoriously expensive. For standard commercial transactions, PayPal charges roughly 3.49% + $0.49. If you are receiving money from a different country, it gets worse.
PayPal often hides its fees in the currency exchange rate. They will take an additional 3% to 4% on top of the transaction fee, and you have no control over the exchange rate they use.
3. ACH Transfers (Direct Bank)
ACH (Automated Clearing House) is a direct bank transfer. It is incredibly cheap. Many banks and modern tools like Wise or Mercury charge 0% to 1% for ACH. For a $1,000 invoice, that saves you around $30 compared to Stripe.
The downside? It is slower. ACH transfers usually take 1 to 3 business days to clear. It is best used for domestic, high value invoices rather than quick, small payments.
Stop losing money to fees
Use our calculator to see exactly what Stripe or PayPal will take, or calculate how much to add to your quote to get your exact target amount.
Try Free Fee Calculator →How to "Gross Up" Your Quotes
Most freelancers make the mistake of saying "My rate is $500, plus fees." The client pays the fees on top of the $500, and the freelancer receives $500.
But what if you say "My rate is $500, and I want $500 in my bank account"? You have to inflate the invoice so that after the gateway takes its cut, you still have $500 left.
If you invoice $520 to a client via Stripe, Stripe takes $15.38 (2.9% + $0.30). You are left with $504.62. If you invoice $530, Stripe takes $15.67, and you are left with $514.33.
Our Fee Calculator has a built in "gross-up" feature. You enter your target amount ($500), select the gateway, and it tells you exactly what to charge the client ($530.50) so you end up with your exact target.
How to set your freelance rates
Once you know your gateway fees, you can set your rates properly. Here is a simple formula:
- Calculate your baseline: What is your hourly rate? Multiply it by the estimated hours.
- Add your taxes: Freelancers pay self employment tax. Set aside 25% to 30% of every payment.
- Add the gateway fee: Factor in the 3% or 4% that Stripe or PayPal will take.
- Check the market: Are clients willing to pay that rate? If not, you need to reduce your baseline, not your fee buffer.
Being precise about your fees is the difference between a profitable freelance business and a stressful one. Use our Free Fee Calculator before you send your next invoice.