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      How to Pay Influencers Using PayPal

      Learn what are the best scenarios to pay your influencers via paypal

      To avoid legal or tax issues when paying influencers via PayPal, especially if you're based in Spain, it's important to follow local tax regulations and PayPal’s terms of service. Here’s a clear guide on who you can pay through PayPal and how to do it properly.

      Who You Can Pay via PayPal

      1. Registered Self-Employed Influencers in Spain

        • Influencers who are officially registered as self-employed (autónomos) and can issue valid invoices.

        • Invoices should include all necessary tax information, including VAT if applicable.

      2. Influencers Based Outside Spain

        • International influencers can be paid via PayPal if they provide an invoice that complies with their local tax rules.

        • Ensure payments follow international tax agreements to avoid double taxation.

      3. Occasional or Low-Value Payments

        • For influencers earning less than €2,000 per year, PayPal can be used with lower risk.

        • If they are not registered as self-employed, you must withhold 15% IRPF and report it to the Spanish tax agency.

      Who You Should Not Pay via PayPal

      1. Unregistered Influencers in Spain

        • Avoid paying influencers who are not registered as self-employed.

        • These payments may be treated as undeclared income, and your business could be responsible for unpaid taxes.

      2. Influencers Receiving Regular Payments

        • Regular payments to unregistered individuals may attract attention from tax authorities.

        • Encourage them to register if the collaboration is ongoing.

      3. Influencers Who Can’t Provide Invoices

        • Payments without proper invoices lack the legal documentation needed for tax and accounting purposes.

      Best Practices When Using PayPal

      1. Collect Documentation

        • Always request and store invoices or signed agreements describing the services provided.

        • Verify the influencer’s tax status.

      2. Apply Withholding Taxes When Needed

        • If the influencer is not registered as self-employed, you must apply 15% IRPF for Spanish residents and declare it accordingly.

      3. Use PayPal for Small, One-Time Payments

        • Limit PayPal use for non-registered individuals to small or occasional payments under €2,000 annually.

      4. Paying International Influencers

        • Make sure they follow local tax rules and provide proper invoices.

        • PayPal is suitable and commonly used for international transfers.

      5. Keep Payment Records

        • Add a clear payment description (e.g., “Payment for content collaboration – January 2025”) in PayPal for reference.