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Purpose Code for Paypal Withdrawal to Bank Account – Freelancers, Bloggers and Affiliates

In my earlier post on paypal bank withdrawal i explained how to connect bank account to paypal profile. Once you connect your bank account and push money to bank account, it opens an interface that tells you to explain the type of money withdrawal.

This new field is called as purpose code added to track the offshore payments for indian paypal users. This is a new rule that RBI enforced on paypal to monitor the type of money that comes to and from paypal account. There are many purpose codes released to categorize offshore trading or payments. In this post i’m only listing specific purpose codes that applies to freelancers, bloggers and affiliates.

If you’re a freelancer (software developer, tester, manager, project mentor, trainee) for any offshore client then purpose code – P0801 applies to you. Here i’m assuming that you’re taking gigs via escrow, elance, freelancer and similar freealncing site. For those who are into software consulting work (freelance or small business) should pick P0802 code for their paypal withdrawal. Hardware consulting and data management and processing should be under P0803 code.

If you’re blogger, freelance writer, content network owner or journalist then you should choose purpose code – P0805. For those who own small content network, journalism or new network, aggregate site then purpose code should be -P0806.

For affiliates and website flippers, purpose code is likely to be P0801 or P0802/03. Information product seller/ebook seller and downloadable product sellers P0801/802/803.

Website designers, graphic designers, animators, illustrators who license their work on freelance artist marketplace and get paid for their license work should choose – P0902.

Note – I take no responsibility for any mistake in above information, because i’m not into legal work. So do your own research before finalizing your purpose code. If there is any correction required for this post then feel free to comment.

If you’re still unsure or need any help from legal adviser or tax consultant related to this information then check with your local legal adviser/Tax consultant.