Unfortunately, there are some things that are best set up for Americans, and PayPal is one of them. Not to mention that in most international or remote settings you are likely to be paid in USD. Thus, if you have a Canadian based PayPal account you could be subject to a lot of fees. Of course you don’t want to have to waste your hard earned money on conversion fees – but don’t stress, there are ways around these annoying fees.
I will breakdown the steps you can take in order to allow USD to be deposited into your PayPal account and then into your bank account without letting PayPal charge you the fees. Of course, if you want to spend this money as CAD (or any other currency) you will have to convert it eventually. But letting your bank to the conversion instead will save you loads in the long run!
What happens if I don’t do anything?
Essentially, if you don’t do anything to your Canadian PayPal account and receive incoming money as USD and then try to deposit this into your Canadian bank, you will be charged a 2.5% conversion fee. This can add up to quite a bit if you are earning your whole salary this way.
What if you make a USD account with your Canadian bank and send the money straight there?
This is a great thought, but unfortunately not an option. PayPal does support connecting a USD Canadian bank account.
Can I just keep my money in USD in PayPal and use it from there?
I mean, if you do a lot of online shopping then sure! However, if you are thinking of getting the PayPal debit card I have some more bad news. This seems like a great idea, but is annoyingly only available for American PayPal.
Should I just open up an American PayPal account instead?
If you are a dual citizen, then absolutely this is what you should do. But, if not, unfortunately this is simply not possible. So back to the drawing board…
So then, what to do if you will get paid in USD on Canadian PayPal?
After accepting my TEFL job in Peru and learning I would be paid on PayPal with USD, I spent a long time trying to figure this out. Many phone conversations and google searches later, I came up with a solution. I will share the steps with you here in case you are in the same boat!
Step one: Change your default currency on PayPal to USD
The first (and easiest) thing you have to do is change your primary currency. In the wallet section, you will see a list of currencies. Or if you only have CAD, you can first add USD by selecting “Add a Currency.” The primary one will be indicated. Beside the others you will see three little dots, simply click this and then select “Make Primary.”
Step two: Open a US based bank account through the cross-border banking option with some Canadian banks
This is definitely the most complicated step, but it is necessary. This process will depend on which bank you are with, but most Canadian banks do offer it. Check out the details here for these banks:
Step three: Link your US account to your paypal
- After logging into PayPal, chose on the wallet button and select “link a bank.”
- Then type in a bank that doesn’t exist and press the “Enter your bank details” option.
- From here, scroll to the bottom and select “Link a U.S. Bank Instead.”
- Enter your bank details
- Follow the steps PayPal will outline for you in order to confirm your account
Step three: Open a USD account with the corresponding Canadian bank
Now you need to get your money from your US account. This should be relatively easy to do. I recommend making an appointment with your bank to set it up! They will also be able to explain exactly how to transfer your money from your US bank account to this one.
Step four: If necessary, convert your money to CAD (or another currency) at this stage
If you can take the money out directly from this USD account at an ATM then you save yourself having to convert to CAD at all. But even if you do need to convert your money to CAD, you can easily transfer it to your CAD account as this point. This should be fee free and have a better exchange rate.
I hope this solution works as well for you as it has for me!
Good luck with the process and feel free to ask any questions you have in the comments! Or let me know if you have found another way to access your money without big fees when you get paid in USD on Canadian PayPal.
