TLDR (Summary)
PayPal invoicing charges 3.49% + $0.49 per transaction, holds funds without warning, and has no project management, time tracking, or white-label branding. Plutio is a fully branded platform where time tracking feeds into invoices, proposals convert to projects, contracts attach with e-signatures, and clients pay from a branded portal. When an invoice goes overdue, reminders send automatically, payment status updates in real time, and the project record reflects every dollar collected.
Why PayPal invoicing falls short for freelancers
PayPal processes payments, but managing an invoicing workflow requires more than payment processing, and PayPal only handles transactions while charging percentage fees.
A $1,000 invoice paid through PayPal costs $35.39 in fees. For freelancers invoicing $75,000 per year, that's $2,600 to $3,700+ lost to transaction fees alone. And in January 2025, PayPal raised Pay Later fees from 3.49% to 4.99% and Virtual Terminal fees from 2.39% to 3.39%, with no advance warning for most users.
The fee structure breaks down like this:
- PayPal/Venmo payments: 3.49% + $0.49 per invoice. A $2,000 invoice costs $70.27 before the client even pays.
- Credit/debit card payments: 2.99% + $0.49 per invoice. Still nearly 3% of every transaction.
- Pay Later (BNPL): 4.99% + $0.49 per invoice. The highest rate PayPal charges, and the one that jumped 1.5% in a single update.
- International surcharge: +1.50% on top of the base rate. International clients cost even more to invoice.
Beyond fees, PayPal invoicing has no project management, no proposals, no contracts or e-signatures, no time tracking, no client portal, no CRM, no task management, no milestone billing, and no white-label branding. Every invoice arrives with PayPal's branding, not the freelancer's. Templates are limited to adding a logo.
Then there's the fund-hold problem. PayPal scores 1.2 out of 5 on Trustpilot across 37,000+ reviews, and the most common complaint is frozen funds. Accounts get flagged, balances get locked, and money sits inaccessible for 21 to 180 days with no clear explanation.
Five recent reviews from Trustpilot show the pattern:
- Dean Evans (Feb 2026): "Took a 200 payment, took their cut and blocked me out of my account for 21 days."
- Daniel Barcello (July 2025): "Stay away from PayPal if you're a business. They'll hold your money ransom."
- Anna (Feb 2026): "I opened an account last year, received about $72 to it and got blocked... They held the money for 6 months and now told me that I am blocked permanently and they will continue to hold my money for 180 more days."
- Heart Beats (Jan 2026): "PayPal UK Ltd is currently holding my legitimate research funds for 120 days."
- G Gustavson (Feb 2026): "PayPal froze my funds, banned my account without explanation... deactivated my account without explaining why."
PayPal held over $170 million from suspended merchant accounts, according to the Wall Street Journal, and a class action lawsuit filed in January 2023 alleged PayPal seizes funds under the guise of "damages." Digital goods like ebooks, coaching sessions, and design files are not covered under PayPal Seller Protection, so freelancers selling those services have zero chargeback recourse.
The real cost of PayPal invoicing isn't just 3.49% per transaction. It's the fund holds, the missing workflow tools, and the fact that every invoice carries PayPal's branding instead of the freelancer's.
What freelance invoicing actually needs
Professional invoicing covers the full cycle from tracked work to collected payment without manual steps, percentage fees, or the risk of frozen funds.
Time tracking that feeds into invoices
Billable hours should flow directly into invoice line items. Task name, duration, hourly rate, and date already filled in, so there's no copying from a separate time tracker, no adding up hours manually at month end, and no risk of missing a billable session. PayPal offers no time tracking at all, so every line item gets typed from scratch or pulled from a separate app.
Payment processing without percentage fees
Flat monthly pricing instead of losing 3-5% of every invoice. At $75,000 per year in invoicing, the difference between a percentage fee model and a flat subscription covers the subscription cost multiple times over. Payment methods should include Stripe, bank transfer, and card processing with the fees clearly separated from the invoicing software cost.
Automated reminders and real-time status tracking
When an invoice goes overdue, the reminder should send automatically at defined intervals. Invoice status should update in real time: draft, sent, viewed, paid, or overdue. A dashboard should show all unpaid invoices across every client without checking a bank account or logging into a separate payment processor.
Branded invoicing experience
Invoices should carry the freelancer's brand, not the payment processor's. Custom logo, brand colors, domain, and layout on every invoice and client-facing page. PayPal stamps every invoice with PayPal branding. A freelancer's invoice is a touchpoint with the client, and having another company's logo on it undermines the professional relationship.
Connected business tools
Invoicing that connects to proposals, contracts, projects, and client records. When a proposal gets signed, the project creates automatically. When time gets tracked, the hours flow into an invoice. When the invoice gets paid, the project record updates. PayPal handles none of that, so each step requires a separate tool and manual data transfer.
Invoicing isn't just payment processing. The full cycle includes tracking hours, generating invoices from project data, collecting payment, sending reminders, and recording everything in the client record, and PayPal covers only the payment step.
How Plutio handles invoicing from tracked hours to payment
In Plutio, an invoice is the final step of a tracked workflow, not a standalone document that gets emailed to a payment processor.
The lifecycle:
- Track hours inside the project: Plutio's time tracking runs inside every project. A timer starts from any task with one click, or hours get logged manually with notes and rates attached. Billable and non-billable hours stay separated automatically.
- Generate the invoice from tracked data: Select a date range, and Plutio's invoicing populates line items from tracked hours. Task name, duration, rate, and total already filled in. Add fixed items, expenses, discounts, or milestone payments as needed.
- Send from a branded portal: The client receives the invoice through email or their branded client portal. The invoice carries the freelancer's logo, brand colors, and custom domain. No third-party branding visible anywhere.
- Collect payment directly: Clients pay through Stripe or bank transfer directly from the invoice. The payment records automatically, the invoice status updates to "paid," and a receipt generates for both parties. No percentage-based platform fee on the invoicing software side.
- Automate follow-up: If the invoice goes unpaid past the due date, automated reminders send at intervals defined in advance. No manual emails, no checking the bank account, no logging into a separate platform to verify payment.
- Recurring invoices: Retainer clients and subscription work get invoices that auto-send on schedule. Same line items, updated dates, automatic payment reminders. No duplicating last month's invoice and updating details manually.
The difference from PayPal: Plutio doesn't charge a percentage on every transaction. The invoicing software, time tracking, project management, proposals, contracts, and client portals all come with the subscription. A freelancer invoicing $75,000 per year pays $19/month for Plutio instead of $2,600-$3,700+ in PayPal processing fees.
The invoice already knows what happened because time tracking, the project, and billing all share the same data. No typing, no copying, no reconciling, and no 3.49% cut on every payment.
Invoice templates that auto-populate from project data
Plutio's invoice templates pull client details, project references, and tax settings from the project record, so every invoice starts pre-filled.
PayPal's invoice templates allow adding a logo. That's the extent of the customization. The layout is PayPal's layout, the branding is PayPal's branding, and the structure is a basic list of line items with no connection to project data or time tracking.
What Plutio's template library includes
- Billing model layouts: Templates structured for hourly billing, project-based work, retainer clients, and mixed billing models with the right line item structure for each.
- Itemized and summary formats: Detailed time logs for clients who want full breakdowns of every tracked hour, or summary invoices for flat-rate and milestone-based projects.
- Multi-currency support: Bill in the client's local currency with automatic conversion rates, without paying PayPal's additional 1.50% international surcharge.
Auto-populated fields
- Client details: Name, address, company, and payment terms pull from the CRM record. No retyping on every invoice.
- Project reference: Invoice ties to the specific project, so revenue by project and client shows accurately in reports.
- Tax configuration: Tax rates set by region and apply automatically to every invoice in that jurisdiction. No manual tax calculations.
- Payment terms: Net 15, Net 30, or custom terms with late fee schedules built into the template.
A Plutio invoice template isn't a document layout. It's a pre-configured billing structure that pulls client data, tracked hours, and tax settings automatically, so every invoice starts 90% complete before a single field gets edited.
The connected workflow: proposals to projects to invoices
A Plutio invoice connects to the proposal, contract, project, time tracking, and client record, so every document in the business references the same data.
- Proposals to projects: A signed proposal creates the project automatically. Tasks, milestones, and timelines populate from the approved scope. No manually recreating the project after winning the work.
- Contracts to projects: Contracts attach to proposals and projects with built-in e-signatures. The client signs, the contract records, and the project activates. There is no contract or e-signature capability in PayPal at all.
- Time tracking to invoices: Every tracked hour on every task feeds into the invoice. Select a date range, and line items populate with task names, durations, and rates. No manual data transfer, no copying from Toggl or Harvest, no reconciling hours against a spreadsheet.
- Invoices to client portals: Clients see unpaid and paid invoices in their branded portal alongside project progress, shared files, and messages. Payment history and receipts are accessible without email requests.
- Project records to revenue reports: Every paid invoice updates the project record. Revenue by project, revenue by client, and unpaid balances all calculate from the same data. No separate accounting spreadsheet.
Without that connection, the workflow requires a proposal tool, a contract tool, a project management tool, a time tracker, PayPal for invoicing, and a spreadsheet to tie everything together. Each tool adds a monthly cost, a login, and a manual data transfer step.
One proposal in Plutio becomes a signed contract, a live project, tracked hours, a paid invoice, and a complete client record, all from the same platform.
With Plutio we don't jump between apps anymore! Everything from projects to invoicing is finally connected in one fully-branded app.
Getting started with Plutio invoicing
Setting up Plutio invoicing takes less time than calculating how much PayPal fees cost over a full year of freelancing.
- Sign up for free (2 mins). 14-day trial, no credit card, full access to invoicing, time tracking, projects, proposals, contracts, and client portals.
- Pick an invoice template (2 mins). Browse the template library. Choose a layout that fits the billing model: hourly, project-based, retainer, or mixed.
- Add branding (3 mins). Upload a logo, set brand colors, configure payment terms, and add tax settings. Connect Stripe or bank transfer for payment collection.
- Generate and send (3 mins). Add line items manually or pull from tracked hours. Send via email or the client portal with a one-click payment link built in.
From signup to a sent invoice with payment processing in under 10 minutes. No percentage-based fees on the invoicing platform, no third-party branding on the invoice, no risk of frozen funds, and no separate tools needed for time tracking or project management.
Plutio starts at $19/month. A freelancer invoicing $75,000 per year through PayPal pays $2,600-$3,700+ in processing fees. The math speaks for itself.
The 3.49% that PayPal charges on every invoice adds up to thousands per year. Plutio replaces that with a flat $19/month subscription that covers every tool in the client workflow, from proposals and contracts to time tracking, invoicing, and branded client portals.
