I just contacted several of my clients and advertisers and asked if they could pay me by check or direct deposit rather than PayPal. PayPal is convenient, but the fees are killing me. Though they’re tax deductible, I paid about $2000 in PayPal fees in 2009. I’d much rather have that money in the bank.
I’ve been thinking about PayPal for the past couple of weeks after one of FWJ’s contributors told me he never uses PayPal because he doesn’t want to deal with the fees. As a client, it’s cheaper and easier for me to pay via PayPal. As a writer, I feel his pain. So I’ve been thinking about the PayPal situation and how to deal with all the fees. I can’t afford to lose such a big chunk of change each year.
- Have clients pay the fees: Negotiating PayPal fees into your project quotes will help to alleviate the blow that comes with PayPal fees. Many clients have no problems with this as they don’t want you to lose money when you write for them. If you have clients cover bounced check or other fees, you should also have it written in to your contract for them to cover the PayPal fees.
- Use a personal PayPal account for occasional payments: If you’re only receiving occasional funds via PayPal, the personal account might be the way to go. Fees aren’t deducted from personal payments. However, if you’re only using PayPal for professional purposes, you will have to open a business account. It doesn’t cost anything to upgrade, except for the fees. Note: Just because you have a personal account doesn’t mean you won’t be hit with fees. If you accept credit card fees via your personal PayPal account, it will be considered a business transaction and you should expect to be hit with fees. Payments marked “goods” or “services” can also be hit with a fee.
- Use direct deposit: Several of my advertisers including Amazon and Google use direct deposit for payment and I absolutely love it. The payments are placed into my business account each month like clockwork, and life is good. When I pay my bloggers, I can easily transfer payment to my PayPal account to send funds.
- Accept checks: I don’t understand why more freelance writers don’t accept checks as payment. Running to the bank to deposit checks is only a very small inconvenience and well worth it when you consider how much you’re saving on fees. My clients are very accommodating when it comes to paying by check and every time I request check over PayPal they say yes. Some writers don’t want to deal with a bounced check. In ten years of freelancing not one client has bounced a check on me. However, it’s written into my agreement that they will have to pay any fees associated with bounced checks or other banking errors.
- Wire transfers are another option, especially for International clients but this can be expensive for all involved, and collection isn’t always easy.
- Transferwise is also an option they fast, reliable and fully transparent money transfers at a small flat fee. It is a simple idea that eliminates red tape and delays around international transfers and allows companies and individuals save in bank transfers.
PayPal fees are tax deductible so be sure you’re keeping track. If you’re not keeping track, you might be surprised at just how much you’re losing each month. There is no denying the convenience of PayPal, but it shouldn’t come at such a high cost. Don’t be afraid to seek alternative forms of payment or request clients handle PayPal fees. You’ll find most are willing to work with you so fees don’t take such a huge bite out of your pay.
How do you get around PayPal fees?