PayPal Question: “Why am I sometimes charged a fee, and sometimes not?”

PayPal Question: “Why am I sometimes charged a fee, and sometimes not?”

Q –

Dear Angela,

My publisher pays my royalties through PayPal, which I like because I get paid fast. I also occasionally get paid for articles through that website. 

My question is, will I be getting a 1099 from my publisher and magazine editors each year, or will PayPal be reporting my income to the taxing authorities?

Also, PayPal occasionally charges me a fee to receive money, but not always. Why is that? 

A –

Since the post office is now slower than ever (and since so much mail gets lost), PayPal is a very convenient way to pay people. Folks get their money instantly (in most cases), and most people already have a PayPal account. Also, if a company is not keeping their authors’ or writers’ tax information in a database, they are far less appetizing to hackers.


The United States and other countries are cracking down on payment reporting. You may have seen in the news that, in the U.S., the feds want every bank to report any individual who has had more than $600 in transactions in a given year. While that legislation is still in the works, they have officially changed their reporting requirements for PayPal and other payment processors. That went into effect on 1/1/22.

Your payments are business transactions. PayPal is required to report business transactions on any business earning $600 or more in a calendar year (The previous threshold for PayPal was $20K or 200 transactions in a year.)


If you do not typically received business transactions through your PayPal account, or if you receive a larger payment than usual, they may put a payment on hold because it’s considered “unusual activity” for your account. That is for your and their security. We receive credit for PayPal payments instantly when people send us money but we’ve been accepting those types of transactions for many years. Thus, PayPal knows we’re a legitimate “business,” and that nobody has hacked our account.

The first reason on the link directly above says:
“The payment you received may be considered unusual for your selling pattern.”

Once PayPal determines that your account is on the up and up, they should no longer make you wait to access your funds.


When somebody sends money to “pay for a product or service,” PayPal will charge the recipient a fee. When somebody sends a payment via PayPal’s friends and family method, they do not charge the recipient a fee (and, they do not report those transactions to tax authorities). However, they may charge the sender a fee, especially if that money is being sent to an account in another country.

Don’t ask your publisher or an editor to send you a business payment via the friends and family method for article writing or book sales. Doing so can get you both into trouble with PayPal AND with the tax authorities. It is very unprofessional to ask someone to commit tax fraud, and doing so can harm your reputation with your publisher and/or magazine editors. 

As a PayPal business customer (writing is a business, after all), per your agreement with that company, they charge fees to receive payments that are for business transactions. Many companies accept the fees as a reasonable cost of doing business since the site makes making and receiving payments so fast and convenient.

We used to mail checks to writers who wrote articles for us, and to authors for royalties. After the post office failed to deliver numerous checks over the years, and after one of our checks was stolen and “washed” in another country, and after countless writers and authors “lost” their checks (and asked for replacements), and after countless others simply never deposited their checks (making my accounting each year-end a nightmare), we switched to PayPal and we’ve never regretted it.

And, while I’ve seen online that some people have reported their PayPal accounts have been hacked, that is rare. To help prevent that, use a completely unique password for your PayPal account, and make it a good one. with lots of differing capital and lower-case letters, and characters (i.e. *, $, #, &, etc.).


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