Cover your Paypal fees

I just thought I’d share a formula I worked out a few years ago when a client asked me to make sure his Paypal website payments were covering the Paypal fees – so that he got the full amount he was asking for.

In the UK, Paypal standard fees are 3.4% plus 20p. So if we invoke the magic of algebra, where x is the total and y is the fee, we start with this:

x = (x+y)-(0.034*(x+y))-0.20

I won’t bother taking you through the workings out, but essentially it ends up like this:

y = (17x+100)/483

So if you take your original total (say £100), multiply it by 17 (£1700), then add 100 (£1800), then divide by 483 – you get the fee: £3.73 (rounded up).

To double-check that: £103.73 (total plus fee) times 0.034 plus 0.20 equals… £3.73 (rounded up) – so Paypal will take £3.73 off your £103.73 leaving you with the original figure.

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