Setting up the right taxes and shipping settings for your PayPal account can seem tricky at first, but are essential for just about any internet merchant, especially if you’re selling physical products.

Here’s the guide for setting up taxes and shipping.

Step 1: Get a Premier or Business Account

Personal accounts can’t setup taxes or shipping; only premier and business accounts can. To set up this account, visit:

If you already have a PayPal account, just click “Upgrade now” to upgrade. Alternatively, click “Get Started” under either category to create the account.


Step 2: Click on “Profile” Under “My Account”

To access the shipping and taxes options, click on “Profile” under the “My Account” tab.


Step 3: Click on “Sales Tax” Under “Selling Preferences”

To setup your sales tax, click on “Sales Tax” under “Selling Preferences” on the column on the right hand side.


Step 4: Add a New Sales Tax

Click “Add New Sales Tax” under either domestic or international to add a new sales tax.

When you click add, you’ll see a screen where you can select by state or country the areas you want to add a sales tax to. To select more than one, click and hold control while selecting another one.

To process by zip code rather than state, click on “Zip Code” in the upper right corner.

Once you’ve selected the areas you want to apply the tax to, type in the tax rate and press “Continue”.

Repeat this process for all the different states and countries you want that have different tax rates.


Step 4: Click “Set Up Shipping Calculations” in “Selling Preferences”

Go back to your Profile screen under your My Account tab. Click on “Set Up Shipping Calculations” to setup your shipping.

Step 5: Click Start and Select Countries

Click “Start” under either domestic or international to get started.


Select where you want to ship your products to. If you want to ship to all states, just add “All States and Territories.”

Click “Continue” once you’ve added all the places you want to add.

If you have different rates for different areas of the country or different places in the world, then create a different shipping option for each.


Step 6: Set Your Shipping Settings

Once you land on your shipping setup screen, you’ll see a screen that looks like this:


Here’s how to setup each section:

1 – Shipping Method Name: Tell your customers what kind of shipping they’re paying for. For example, “Economy” or “Global Priority” or “One-day shipping.”

2 – Select Delivery Time: Tell your customers when they can expect to receive their package.

3 – What are shipping rates based on: If you want to base how much shipping costs on the total cost of the order, then select “order amount.” If you want it to be based on the weight of the products, select “order weight.” If you want it based on how many items they ordered, select “item quantity.”

4 – What are your shipping rates: Create a range for the order amount, weight or item number, then type in a rate. For example, if orders between $1 and $20 cost $3 to ship, then you’d put in $1, then $20 then $3 in the boxes above.

Click Continue when you’ve added all your settings.


Step 7: Review and Save

Review your settings. If everything looks in order, click Save Shipping Methods.