Best Way To Withdraw Money in UK

[ceilingeyes]

Hi I’m a seller based in the U.K. I’ve been selling on here for about a year.

I withdraw my money via PayPal as I’m familiar with it and it’s convenient. However, I thought the PayPal fees were around 3% but, I assume due to the currency exchange of dollars to pound sterling, I end up losing more like 9% - just through PayPal.

Obviously there is the 20% Fiverr cut taken from the price of your order before you even get anything, that’s fine I understand that (although I do think that’s too high considering they also charge the buyer tax on top of what you actually charge so the site is charging you both).

So say I get a $100 order, I get $80 which is roughly £65. The PayPal fees I thought would be around 3% based on the info on their site, which is about £1.95, but I actually end up losing about 3x this amount so I would end up with roughly £56, almost 1/10th of what I expected to get is now lost in fees.

Has anyone else had this problem? Should I use a different method of withdrawal? Is there a way round these fees? Are they right and should I just accept it?

Any help would be greatly appreciated.

James / ceilingeyes

[erik_keresztes]

Don’t use the PayPal currency exchange, transfer it in USD to your bank and the bank will do the transaction, most of the times it will be a better exchange than PayPal’s, to be sure you can check your bank’s website

[english_voice]

I’m with you on this one. I wrote a similar post a couple of months ago.

I’m also based in the UK and lost 9% on transfer fees. I withdrew over $2,000. I didn’t do full research, and like you I figured I would lose 3-4% based on a quick Google.

I’ll be honest and say I couldn’t find a satisfactory explanation, it appears very complex!

As @erik_keresztes has suggested, I’d already decided that next time I will withdraw a smaller amount to my bank account and see how that goes. I also need to look into Transferwise as some people have suggested that previously - no idea if I can use that with Fiverr though.

The experience changed how I look at taking on and pricing jobs through Fiverr.

As a rough rule of thumb, when pricing a job, I simply halve the proposed $ amount for the job to get my £ profit after all fees / taxes, etc. This simple method gives me a realistic feel for whether a job is worth taking on.

Quick example $100 job >>> Fiverr take $20 leaving $80 >>> I lose 9% in fees (lets say 10% for ease of maths) >>> leaving me $72 that then becomes £58 after currency exchange >>> then another 20% (approx) in tax and insurance leaving me with £46.

I’ve also started being far stricter with enforcing my gig pricing. For example, previously if someone wanted 9,249 words proofread, I would have said let’s call 9,000 and I’ll charge $90. Now I treat those 249 words as an extra gig, so the client pays $100 as per the gig description.

Just another really quick thought, not that I ever would explain the above to a client, but sometimes I really do want to! Most buyers have no idea about the amount of money we have to pay out it in fees / taxes as genuine UK based freelancers.

[lauracvoiceover]

I’m trying to look into this as well, being based in the UK. Have you compared all of the different ways of withdrawing money - so paypal, bank transfer and revenue card?
Is paypal still the best way to go, its super confusing trying to work out if any are better than the other? Do you look at GBP USD rates when you withdraw as well?
Thanks

[samcaff]

When we started off on Fiverr we were using Paypal but then found a much better way to receive our hard earned money.

USE Payoneer.

Fiverr uses USD as it's default currency. If you withdraw different currencies from fiverr or paypal you will be given a very poor exchange rate. Here is how to solve this. 

Set up a Payoneer account and withdraw your funds in USD from Fiverr. Payoneer only charge you $1 to do this. 
Next if you are from the UK (not sure for other countries) set up a Transferwise account. 

Send the Payoneer funds to your transferwise account. 

Change your USD to GBP/Euro or any other currency you require at a VERY good rate saving you ALOT of money on exchange fees that paypal take.

This is by far the BEST way to save money hands down. 

I hope this helps everyone who looses out when changing currencies!

 

Edited October 12, 2021 by samcaff

[nathanielsvoice]

I just want to warn users against using PayPal to withdraw. For whatever reason, my Payoneer account (my usual withdrawal method) has jammed up. I contacted Fiverr Support who were useless. I have tried calling Payoneer, the number doesn't connect. I have tried LiveChatting them 3 times now, twice it has disconnected, and the third attempt I've been waiting for half an hour and the system is trying desperately to kick me out of the queue, checking if I'm still here every 3 minutes.

I have withdrawn my USD balance to my PayPal account. I now have two options to transfer this balance into my British bank account: transfer direct from PayPal to my UK bank account (no fee, but a conversion rate: $1.00 USD = £0.737879 GBP), or through their service called Xoom by PayPal, to transfer to my Wise (formerly TransferWise) account, where I get a conversion rate of $1.00 USD = £0.768905 GBP).

The only trouble is Xoom by PayPal requires you to pay $10 USD from a local bank account to make the payment. The only US account I have is my Wise account. But guess what? You can't transfer money into the account that you're using to pay the transfer fee. Clever move from PayPal. So you're forced to use PayPal's direct transfer, the rate of which is 4% worse (so effectively a 4% fee).

Because I have always used Payoneer which charges a $3 flat fee, I waited until I had a fairly high balance in Fiverr before making my transfer. This is bad news now that I've done it through PayPal as I'm losing 4% of my earnings (on top of the 20% that Fiverr takes for every job and the massive slice the tax man takes off me). Things like this make it almost not worth while bothering to freelance.

In short, don't use PayPal to transfer to GBP. They'll fleece you. 

[artsantis]

Hi there!
I tried to set up the payoneer account by entering the "bank account" as whithdrawal method from fiverr, but in that case it's only a method operated by payoneer and it doesn't allow me to connect an account where to directly deduct in USD, but to connect an account with Iban and therefore to have an unfavorable conversion rate at the time of withdrawal.
Do you know if this method is still valid as of today (June 2022) or if I'm doing something wrong in setting this method? I'm in Italy, so I need to find the best method for a USD EUR exchange starting from the Fiverr USD earnings
Thanks in advance

[theratypist]

On 6/20/2022 at 5:46 AM, artsantis said:

I tried to set up the payoneer account by entering the "bank account" as whithdrawal method from fiverr, but in that case it's only a method operated by payoneer and it doesn't allow me to connect an account where to directly deduct in USD, but to connect an account with Iban and therefore to have an unfavorable conversion rate at the time of withdrawal.
Do you know if this method is still valid as of today (June 2022) or if I'm doing something wrong in setting this method? I'm in Italy, so I need to find the best method for a USD EUR exchange starting from the Fiverr USD earnings

I'm not sure if OP is still active. But here is an article from Fiverr help on withdrawing funds -- not sure which would be the most effective method but I hope this gives some insight

https://www.fiverr.com/support/articles/360010530058-Getting-paid-Withdrawing-your-earnings?segment=seller

Quote

Withdraw funds in your local currency

You can withdraw revenue in:

• USD ($)
• Euro (€)
• British Pound (£)
• Australian Dollar (A$)
• Canadian Dollar (C$)
• Israeli Shekel (₪).

Currency considerations

Currency conversion fees apply and additional charges may be added by your bank or payment provider.

If you withdraw in a currency other than US$, you'll be asked to confirm the withdrawal currency and amount. This amount includes the conversion fees and, as a result, the amount may appear to be less. This is because it's the exact amount sent to your withdrawal account (non-US$)—after the conversion fees have been applied.

If you don't want to withdraw in your local currency, you can update your currency from Settings—through the confirmation window.

If you currently receive funds in US$, to the Fiverr Revenue Card or to your Payoneer Account and would now like to receive funds in EUR, GBP, AUD, CAD, or ILS, you'll need to register again—instead of connecting your payout method. 

[sabinespoems]

13 hours ago, artsantis said:

I tried to set up the payoneer account by entering the "bank account" as whithdrawal method from fiverr, but in that case it's only a method operated by payoneer and it doesn't allow me to connect an account where to directly deduct in USD, but to connect an account with Iban and therefore to have an unfavorable conversion rate at the time of withdrawal.
Do you know if this method is still valid as of today (June 2022) or if I'm doing something wrong in setting this method? I'm in Italy, so I need to find the best method for a USD EUR exchange starting from the Fiverr USD earnings

I mentioned my method of withdrawing before on the forum but I can't retrieve it so I'll just explain it here again!

I live in the Netherlands so I'm dealing with the conversion rates like you as well. I've adopted the same method as the OP. My Payoneer account is in USD and the same goes for my Wise account (formerly known as Transferwise). On my Wise account I've also set the currency to USD. On Wise however, I've linked my personal bank account. So when I withdraw my money from Wise, it converts into EUR and gets deposited on my own 'actual' bank account. 

It was quite a hassle for me to setup though but as the OP said, it was definitely worth it! 

Have you already set up a Wise account? Because Fiverr doesn't indeed allow countries outside of the US to directly deposit it into your personal bank account. Maybe that's why you haven't succeeded yet? 

[cc_animation]

On 6/21/2022 at 1:13 AM, sabinespoems said:

I mentioned my method of withdrawing before on the forum but I can't retrieve it so I'll just explain it here again!

I live in the Netherlands so I'm dealing with the conversion rates like you as well. I've adopted the same method as the OP. My Payoneer account is in USD and the same goes for my Wise account (formerly known as Transferwise). On my Wise account I've also set the currency to USD. On Wise however, I've linked my personal bank account. So when I withdraw my money from Wise, it converts into EUR and gets deposited on my own 'actual' bank account. 

It was quite a hassle for me to setup though but as the OP said, it was definitely worth it! 

Have you already set up a Wise account? Because Fiverr doesn't indeed allow countries outside of the US to directly deposit it into your personal bank account. Maybe that's why you haven't succeeded yet? 

I'm also from the Netherlands, checking on the best way to withdraw. How much did you save by using this method compared to Paypal?

[theratypist]

25 minutes ago, cc_animation said:

I'm also from the Netherlands, checking on the best way to withdraw. How much did you save by using this method compared to Paypal?

 She shared a quick sample in another thread because I was also curious.... 🙂

 

"I don't mind at all! I'd feel the same way that's why I suggested it 😊 I'll use last month of May as an example;

The amount I withdrew from Fiverr was $464,67. If I withdrew it directly to PayPal it would've been 409,42 EUR. To check this I simply click the PayPal button and see the amount it converts to.

Instead, I deposited it to Payoneer and the amount became $463,67 with the $1 fee being deducted. When I withdrew it from Wise it was $461,43, which makes the fee deducted from the 'Payoneer' amount $2,24. 

Taking conversion rates into account, the total that was deposited on my bank account was 429,43 EUR. This is 20 EUR more that if I directly deposited it into my PayPal account. 

For some who have a higher revenue, 20 EUR is peanuts and simple change which isn't worth the extra hassle. However in my mind I believe it's a real waste (and simply unfair haha) to lose 20 EUR that could've been circumvented with just a few extra mouse clicks!"

[cc_animation]

3 minutes ago, theratypist said:

 She shared a quick sample in another thread because I was also curious.... 🙂

 

"I don't mind at all! I'd feel the same way that's why I suggested it 😊 I'll use last month of May as an example;

The amount I withdrew from Fiverr was $464,67. If I withdrew it directly to PayPal it would've been 409,42 EUR. To check this I simply click the PayPal button and see the amount it converts to.

Instead, I deposited it to Payoneer and the amount became $463,67 with the $1 fee being deducted. When I withdrew it from Wise it was $461,43, which makes the fee deducted from the 'Payoneer' amount $2,24. 

Taking conversion rates into account, the total that was deposited on my bank account was 429,43 EUR. This is 20 EUR more that if I directly deposited it into my PayPal account. 

For some who have a higher revenue, 20 EUR is peanuts and simple change which isn't worth the extra hassle. However in my mind I believe it's a real waste (and simply unfair haha) to lose 20 EUR that could've been circumvented with just a few extra mouse clicks!"

Thanks for that.

I deduct the conversion fees in my tax report as business costs (ie. the difference between withdrawal amount and actual received amount) so I'm not sure if it's worth the hassle of going through Payoneer > Wise for that amount.

[theratypist]

3 minutes ago, cc_animation said:

I deduct the conversion fees in my tax report as business costs (ie. the difference between withdrawal amount and actual received amount) so I'm not sure if it's worth the hassle of going through Payoneer > Wise for that amount.

Hey, that's actually a good way to see it too.

[sabinespoems]

6 hours ago, cc_animation said:

I deduct the conversion fees in my tax report as business costs (ie. the difference between withdrawal amount and actual received amount)

This is very interesting, especially since we're from the same country. I assume you have a registered business? Although I'm technically a freelancer, I always thought what I do through Fiverr just simply makes me a person earning an extra buck on the side. That's why I don't think your method would apply to my case? 🤔

But deducting the conversion fees definitely wouldn't make these steps I'm doing worth it. Could you maybe shed some light on how you're able to deduct it as such? I understand it might be too complicated with all the tax specific details (I'll definitely look into it myself), but perhaps you can provide me with some starter knowledge!  

 

[cc_animation]

16 hours ago, sabinespoems said:

This is very interesting, especially since we're from the same country. I assume you have a registered business? Although I'm technically a freelancer, I always thought what I do through Fiverr just simply makes me a person earning an extra buck on the side. That's why I don't think your method would apply to my case? 🤔

But deducting the conversion fees definitely wouldn't make these steps I'm doing worth it. Could you maybe shed some light on how you're able to deduct it as such? I understand it might be too complicated with all the tax specific details (I'll definitely look into it myself), but perhaps you can provide me with some starter knowledge!  

 

Hi Sabine,

Yes, I have a registered business and as a full-time freelancer I'm allowed to deduct all business related costs. I keep track of all costs (invoices, receipts) and my bookkeeper handles the tax return and everything.

Are you doing this work on the side? Are you employed? Then the Belastingdienst will likely classify your revenue from Fiverr as 'resultaat uit overige werkzaamheden'. But even then you should be able to deduct most business-related costs (phone, computer, software subscriptions, Paypal fees, etc).
Maybe there is a treshold for that if you're not classified as a full-time 'ondernemer', so always check with an accountant. I'm not a tax expert so don't take my advice for granted 🙂

[sabinespoems]

6 hours ago, cc_animation said:

Are you doing this work on the side? Are you employed? Then the Belastingdienst will likely classify your revenue from Fiverr as 'resultaat uit overige werkzaamheden'. But even then you should be able to deduct most business-related costs (phone, computer, software subscriptions, Paypal fees, etc).

I do this work on the side, and indeed filed my tax report for the category you mentioned. However, I didn't know about the last part! Even though you're not sure, it's worth looking into 😊

6 hours ago, cc_animation said:

Maybe there is a treshold for that if you're not classified as a full-time 'ondernemer', so always check with an accountant. I'm not a tax expert so don't take my advice for granted 🙂

But your advice/insight is definitely much appreciated regardless, thank you! 

[samus_x]

On 6/27/2022 at 7:31 PM, theratypist said:

 She shared a quick sample in another thread because I was also curious.... 🙂

 

"I don't mind at all! I'd feel the same way that's why I suggested it 😊 I'll use last month of May as an example;

The amount I withdrew from Fiverr was $464,67. If I withdrew it directly to PayPal it would've been 409,42 EUR. To check this I simply click the PayPal button and see the amount it converts to.

Instead, I deposited it to Payoneer and the amount became $463,67 with the $1 fee being deducted. When I withdrew it from Wise it was $461,43, which makes the fee deducted from the 'Payoneer' amount $2,24. 

Taking conversion rates into account, the total that was deposited on my bank account was 429,43 EUR. This is 20 EUR more that if I directly deposited it into my PayPal account. 

For some who have a higher revenue, 20 EUR is peanuts and simple change which isn't worth the extra hassle. However in my mind I believe it's a real waste (and simply unfair haha) to lose 20 EUR that could've been circumvented with just a few extra mouse clicks!"

So in this case, if you use the Payo-wise trick you would get a +5%-ish  in your pocket.

But I wonder how (and IF) this percentage grows/decreases when the amount you withdraw grows/decreases.

Because as @cc_animation puts it yes, for 20€ it is not worth the hassle, but when you talk about the 5% of thousands... well, that would be a completely different scenario, especially for countries with a neolitic tax system like mine that do not allow yet to deduct all of your costs, especially when speaking of online business 🤔

[azmain7]

On 10/12/2021 at 12:40 PM, samcaff said:

When we started off on Fiverr we were using Paypal but then found a much better way to receive our hard earned money.

USE Payoneer.

Fiverr uses USD as it's default currency. If you withdraw different currencies from fiverr or paypal you will be given a very poor exchange rate. Here is how to solve this. 

Set up a Payoneer account and withdraw your funds in USD from Fiverr. Payoneer only charge you $1 to do this. 
Next if you are from the UK (not sure for other countries) set up a Transferwise account. 

Send the Payoneer funds to your transferwise account. 

Change your USD to GBP/Euro or any other currency you require at a VERY good rate saving you ALOT of money on exchange fees that paypal take.

This is by far the BEST way to save money hands down. 

I hope this helps everyone who looses out when changing currencies!

 

Could you explain how to transfer money from payoneer to Transferwise ?

Thanks 🙂