PayPal Nonprofit Fees: What the Charity Rate Really Costs

What does PayPal charge nonprofits?

PayPal's US merchant fees page lists a charity rate of 1.99% + $0.49 per domestic transaction for Confirmed Charities, as of October 2026, plus 1.50% on international transactions. The standard rate for the Donate button is 2.89% + $0.49, and standard PayPal Checkout is 3.49% + $0.49. The charity rate is not automatic: you apply for it and PayPal must approve.

What the discount actually covers

The charity rate cuts the percentage portion by 0.90 points against the Donate-button rate. It does not change the $0.49 fixed fee. That's why your average gift size matters more than the headline rate.

(Fees rounded to the cent.)

Worked example

A small nonprofit receives 400 domestic PayPal donations a year averaging $50, so $20,000 in total.

Standard Donate rate: $50 × 2.89% = $1.445, + $0.49 = $1.935 per gift; × 400 = $774 per year

Charity rate: $50 × 1.99% = $0.995, + $0.49 = $1.485 per gift; × 400 = $594 per year

Saving: $774 − $594 = $180 per year, for one application.

If those gifts came through standard PayPal Checkout instead (3.49% + $0.49): $50 × 3.49% = $1.745, + $0.49 = $2.235; × 400 = $894. The charity rate saves $894 − $594 = $300.

If 50 of the 400 gifts were international, each carries an extra 1.50%: 50 × $50 × 1.50% = $37.50 more per year.

Gift mix matters more than the rate

Use averages carefully. A year of 300 gifts at $10 and 100 gifts at $170 also totals $20,000, but the fixed fee hits the small gifts hard:

• Fixed fees: 400 × $0.49 = $196
• Percentage fees: $20,000 × 1.99% = $398
• Total: $594, the same as before, because total fees depend on transaction count and volume, not the average.

What changes is the share each gift loses. The $10 donors lose 6.9%; the $170 donors lose about 2.3%. To reduce fees, the levers are fewer, larger transactions (for example, encouraging monthly donors to give quarterly) and cheaper payment methods for recurring gifts.

PayPal or Stripe?

Stripe's nonprofit rate, as reported by Stripe partners, is 2.2% + 30¢ (Stripe itself doesn't publish the number). On a $50 gift that's $1.10 + $0.30 = $1.40, slightly less than PayPal's $1.485. On a $500 gift Stripe costs $11.30 versus PayPal's $10.44. Small gifts favor the lower fixed fee; large gifts favor the lower percentage. See the Stripe page and our nonprofit payment processing fees guide for a full comparison.

Many donors simply prefer paying with PayPal, so the practical answer is often to keep both and get the nonprofit rate on each. The free audit estimates processing costs alongside your software.

Who should and shouldn't apply

Apply if you take donations through a PayPal Business account and can provide proof of legal registration and authorization from an officer.

Remember that approval is at PayPal's discretion, and the rate is for donations. Ask PayPal how event tickets, merchandise, or other sales on the same account are treated.

Church eligibility

Our data records no exclusion of churches. PayPal's charity rate requires proof of legal registration as a charity and PayPal's approval. A church should ask what proof PayPal accepts if it has no IRS determination letter. See church eligibility for nonprofit discounts.