How to Use PayPal for Freelance Work

How to get payments is always a concern for freelancers. This is where platforms like PayPal make things easier. Here is a detailed guide on using PayPal for freelance work.

With the number of freelance platforms and freelancers increasing, the need for secure payment methods has also soared. Fortunately, online payment platforms and services have kept up with these requirements.

While most people are using PayPal for freelance work, other payment options are also being explored by the online community. PayPal has grown immensely since its foundation in 1998, emerging as one of the most popular payment methods today.

In this guide, I’ll discuss how PayPal compares with other payment methods and why you need to have a Paypal freelancer account in this day and age.

How to Pay Freelancers

Basically, how freelancer payment works is that you complete a gig, and you get paid. So, there’s no need to wait for the end of the month. Therefore, bank transfer – especially international – is not always a feasible method.

Pay Freelancers

Whether you’re an employer searching for the best ways to pay freelancers or a freelancer looking for the best ways to get paid, here are some options to consider.

PayPal

PayPal supports the international freelancing market in true essence, considering it has 227 million active users who can make transactions in 25 currencies. Besides individuals, many companies are also using PayPal.

using paypal for freelance work

So, if you bag a handsomely-paying client who has PayPal, payments become a breeze.

Part of the reason why using PayPal for freelance work has become so common is the ease of use provided by the platform.

One, it allows you to pay using your credit card. Two, you can make bank account payments.

Three, the mobile app makes it extremely simple and quick for anyone to make payments on the go. Four, it’s quite secure and trusted all over the world.

PayPal is not merely a remarkable option for freelancers to get paid but also a simple way for clients to pay. As an employer, you can use the mass electronic payment features on PayPal to pay all freelancers working for you with a single click.

Here are some other notable features of PayPal:

  • Quick and simple payments
  • Send money to multiple people simultaneously
  • Send payments in multiple currencies to different countries
  • Payment tracking
  • Integration with many platforms and software
  • Competitive fees

Payoneer

Payoneer is another payment method that allows mass electronic transactions, letting you pay up to 200 beneficiaries at once. Like PayPal, it also has a cross-border payment option, covering up to 150 currencies and 200 countries.

Payoneer

Here are some other features of Payoneer:

  • Allows the receivers to withdraw the funds into their bank accounts
  • Payment in multiple currencies
  • Free transfers help save money
  • Regulated in the European Union and the US
  • Licensed for global operation
  • Funds are available as quickly as two hours following a transfer
  • Payments through online wallets, credit cards, international checks, and bank transfers

See Related: Awesome Freelance Business Cards

Venmo

If you don’t have a PayPal freelancer account yet, you can use Venmo to send and receive money. Although fairly useful, the platform is not as professional as Paypal or Payoneer.

Venmo logo

However, it’s an online wallet that enables you to send money through major debit cards, Venmo balance, and US bank accounts. An apparent downside of Venmo is its exclusive availability in the US.

Here are some notable features of Venmo:

  • Sign up with email or Facebook to create an account
  • Free transactions with certain debit cards
  • Receiving money is free
  • Payments through bank accounts or Venmo balance
  • Money transferred to freelancers’ bank accounts in one business day

Xoom

If you want to know how to receive payments for freelance work on your doorstep, you might want to check out Xoom. The money transfer service is operational in 32 countries and allows you to send money in several currencies.

Xoom logo

It’s much simpler than some other payment methods as employers merely have to transfer money from their bank accounts into a freelancer’s account. As a freelancer, you can choose to pick up your money from particular locations, like Western Union.

Here are some other features of Xoom.

  • Simple to use
  • Door-to-door deliveries and cash pickups in some countries
  • Payments through bank accounts or credit cards
  • Money can be sent to a pick-up location or a bank account

Since there are a ton of other payment options, I can go on and on about the services you can use. However, this guide’s focus is on highlighting the potential of PayPal as the primary payment service for freelancers. So, let’s get deeper into it.

Benefits of Using PayPal for Freelance Work

In the past few years, PayPal has become synonymous with online payments, with phrases like ‘PayPal it to me’ and ‘PayPal me a $50’ becoming common. That’s because PayPal introduced people to a number of interesting features that played a huge role in driving the e-commerce and freelancing markets.

Benefits of Using PayPal for Freelance Work

Here are some of the benefits of using PayPal for freelance work.

Safe Transactions

One of the major reasons for most online workers having a PayPal freelancer account is safe transactions. PayPal promises protection for your purchases and account on the whole.

If you’re shopping for anything online, you feel safe, considering there’s no need to give your financial information to any random website on the Internet. Instead, you can simply use your PayPal account.

PayPal also offers protection after a transaction – a rare feature in online payment transfer services.

If your payment details don’t match the description or are a no-show, PayPal will help you get a refund.

Large Network

Covering 203 global markets, PayPal is one of the largest payment networks in the world. Since the freelancing industry has grown substantially around the globe, this feature comes in handy for international payments.

 

Furthermore, there’s no need for currency conversion as PayPal supports the most common currencies.

Apart from one-time payments, the platform also offers fast transactions for recurring payments for long-term, contract-based freelance work.

One Touch

It’s 2021, and you can finally let go of the hassle of carrying a wallet around everywhere.

One Touch logo

PayPal lets you pay freelancers without writing your account number for every single transaction. All you have to do is type your password, and you’re good to go.

To make the transactions even faster, you can activate One Touch in PayPal. It lets you stay logged in on PayPal on your chosen devices.

Xero Integration

Another benefit of using PayPal for freelance work is that it integrates with Xero.

Xero Integration logo

Xero is accounting software that helps you make business budgets. Furthermore, you can use it to create invoices and send them to your clients via email.

So, integrating Xero with your PayPal freelancer account saves you a ton of hassle.

The invoices you send out will have a payment button in them. When you choose your default payment option to be PayPal, the client can pay you quickly by clicking on the button in the invoice.

Even better, Xero displays the payment in your account immediately while marking the invoice as paid. Plus, it also shows you the transaction fee and lists it under Bank Charges.

Therefore, with Payal integration, Xero makes accounting a piece of cake for you.

Income Tax Payment

When learning about how freelancer payment works, taxes often come up. Freelancers also have to pay taxes despite not being affiliated with any company.

Fortunately, PayPal lets you pay your federal income taxes. You can pay them through USAtax.com to the IRS if your total payments exceed $99. Here are some tools to calculate your tax for the season:

When you pay your taxes through PayPal, the IRS receives the payment right away. Make sure to pay on time since most freelance platforms will probably block your account if you’re running late on tax payments.

Banking Services

PayPal has been rolling out banking services in the past few years. Now, it offers a ton of services, including credit cards, debit cards, and ATM.

The PayPal ATM is called PayPal Cash Card. You can use it at any MoneyPassATM without any withdrawal charges. Plus, it can be used to withdraw funds from your main account. Likewise, the debit card lets you withdraw funds too.

On The Go Payments

PayPal Here is the mobile app you can use to access your PayPal account. It’s available for Android and iOS, catering to freelancers using all sorts of devices.

Since the app is free, you can download it today and start receiving or sending payments online today.

Thanks to the phone app, clients can still pay you if they’re away from their desktops or on vacation in a remote corner of the world.

PayPal For Freelancers Personal Or Business

PayPal emphasizes being freelancer-friendly as the platform allows online workers to get paid in most countries around the world. Moreover, many popular freelancing platforms, such as Fiverr, Freelancer, Upwork, and 99designs, support PayPal payments.

UpWork logo

Why PayPal?

PayPal claims that its service is freelancer-friendly since it’s trusted by clients. If you accept Paypal payments, your clients will have ultimate peace of mind, being familiar with the platform’s safe transactions.

In fact, the 2018 Online Payment Experiences Study showed that 44% of the customers have a higher likelihood of trusting a business if it accepts PayPal.

Furthermore, since PayPal gives your clients multiple methods to pay, you’ll get paid on time. Your clients can select the card they prefer and send the payment right into your account.

At the moment, PayPal is being used in more than 200 markets globally. So, it gives you the liberty to expand your reach and get clients from other continents too.

3 Ways To Get Paid On PayPal

If you have a PayPal freelancer account, you can get paid in three ways.

  • Professionals Invoices: You can create professional and customizable invoices and send them to your clients. If you’re uncertain about the rates to charge, use an hourly rate calculator to determine your earnings for the gig.
  • PayPal.Me: This feature allows you to send a personal payment link to your clients through any messaging app, email, or text.
  • Email Payment Requests: Once you’re done with a gig, you can send an email payment request to your client via your business account. Then, they can pay using any card of their preference.

Which Freelancer PayPal Account Type Should You Use?

PayPal offers two types of accounts that are equipped to meet your needs.

Personal

You can use the personal freelancer PayPal account type if you’re a beginner or intermediate freelancer who only needs to accept payments or shop online.

Business

The business freelancer PayPal account type is suitable for you if you run a small freelancing agency or team. In a PayPal business account, you can:

  • Operate under your business name
  • Accept bank account, debit card, and credit card payments
  • Give access to 200 employees
  • Have a designated email address for issues related to customer service

Comparison Of PayPal With Other Payment Methods

When choosing a payment method that makes more sense for your freelancing needs and frequency of funds transfer, you need to compare different platforms. Here’s a table showing how PayPal compares with some other payment methods.

Features PayPal TransferWire Payoneer
Mass Payments Yes Yes
Routes of Currency Conversion 26 Over 300 Over 100
Payment Speed 3 to 5 days 1 to 4 days 2 hours
ACH Cost $0.25 per transfer $0.35% (US only) $3.00 per transfer
Credit Card $0.25 per transfer $1.2% $3.00 per transfer
Debit Card $0.25 per transfer $3.6% $3.00 per transfer

As evident, using PayPal for freelance work is a budget-friendly choice since the PayPal freelancer fees are much lower as compared to some other platforms.

Besides benefiting from low PayPal freelancer fees, you can also use your account for online shopping, making bookings, and paying taxes.

Conclusion

If you ever had any confusion about how to pay freelancers, they must be clear now. Using PayPal for freelance work is not just pocket-friendly but also a quick and safe way to receive payments from any corner of the world.

Now, you can set up PayPal for freelancers, personal or business, and benefit from the platform’s many features.

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