Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

PayPal Holdings Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal	688)	6)	310)	132)	180)
State and local	104)	80)	143)	47)	32)
Foreign	966)	326)	245)	629)	278)
Current portion of income tax expense	1,758)	412)	698)	808)	490)
Federal	(563)	(401)	259)	(107)	(115)
State and local	(101)	(45)	(32)	(39)	(35)
Foreign	(147)	(36)	(62)	(123)	(21)
Deferred portion of income tax expense (benefit)	(811)	(482)	165)	(269)	(171)
Income tax expense (benefit)	947)	(70)	863)	539)	319)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Download chart

Item	Description	The company
Current portion of income tax expense	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	PayPal Holdings Inc. current portion of income tax expense decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.
Deferred portion of income tax expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	PayPal Holdings Inc. deferred portion of income tax expense (benefit) decreased from 2020 to 2021 and from 2021 to 2022.
Income tax expense (benefit)	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	PayPal Holdings Inc. income tax expense (benefit) decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

PayPal Holdings Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
Domestic income taxed at different rates	-0.60%	-1.70%	0.00%	0.00%	0.00%
State taxes, net of federal benefit	0.00%	0.90%	2.20%	0.30%	-0.10%
Foreign income taxed at different rates	-12.20%	-13.40%	-7.40%	-5.00%	-3.90%
Stock-based compensation expense	4.10%	-7.30%	-1.20%	-3.90%	-4.10%
Tax credits	-0.40%	-2.40%	-2.00%	-2.40%	-2.10%
Change in valuation allowances	2.20%	0.50%	0.10%	0.10%	0.00%
Intra-group transfer of intellectual property	10.00%	0.70%	4.10%	7.60%	0.70%
Other	4.00%	0.00%	0.20%	0.30%	1.00%
Effective income tax rate, before the Tax Act	28.10%	-1.70%	17.00%	18.00%	12.50%
U.S. tax reform (the Tax Act)	0.00%	0.00%	0.00%	0.00%	0.90%
Effective income tax rate	28.10%	-1.70%	17.00%	18.00%	13.40%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Download chart

Item	Description	The company
Effective income tax rate, before the Tax Act	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	PayPal Holdings Inc. effective income tax rate, before the Tax Act decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

PayPal Holdings Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net operating loss and credit carryforwards	355)	317)	201)	182)	196)
Accruals, allowances, and prepaids	427)	622)	413)	235)	179)
Lease liabilities	173)	176)	188)	120)	—)
Partnership investment	—)	5)	6)	8)	9)
Stock-based compensation	154)	188)	196)	160)	136)
Net unrealized losses	151)	23)	4)	5)	8)
Acquired intangibles	38)	—)	—)	—)	—)
Fixed assets and other intangibles	655)	84)	11)	88)	—)
Deferred tax assets	1,953)	1,415)	1,019)	798)	528)
Valuation allowance	(341)	(274)	(166)	(184)	(132)
Net deferred tax assets	1,612)	1,141)	853)	614)	396)
Unremitted foreign earnings	(42)	(35)	(21)	(17)	(35)
Fixed assets and other intangibles	—)	—)	—)	—)	(58)
Acquired intangibles	—)	(240)	(153)	(103)	(167)
ROU lease assets	(138)	(154)	(172)	(116)	—)
Partnership investment	(12)	—)	—)	—)	—)
Net unrealized gains	(135)	(351)	(440)	(71)	(21)
Deferred tax liabilities	(327)	(780)	(786)	(307)	(281)
Net deferred tax assets (liabilities)	1,285)	361)	67)	307)	115)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Download chart

Item	Description	The company
Deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	PayPal Holdings Inc. deferred tax assets increased from 2020 to 2021 and from 2021 to 2022.
Net deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	PayPal Holdings Inc. net deferred tax assets increased from 2020 to 2021 and from 2021 to 2022.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	PayPal Holdings Inc. net deferred tax assets (liabilities) increased from 2020 to 2021 and from 2021 to 2022.

PayPal Holdings Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Deferred tax assets, non-current (included in Other assets)	1,310)	547)	142)	396)	224)
	Deferred tax liabilities, non-current (included in Deferred tax liability and other long-term liabilities)	25)	186)	75)	89)	109)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Download chart

Item	Description	The company
Deferred tax assets, non-current (included in Other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	PayPal Holdings Inc. deferred tax assets, non-current (included in Other assets) increased from 2020 to 2021 and from 2021 to 2022.
Deferred tax liabilities, non-current (included in Deferred tax liability and other long-term liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	PayPal Holdings Inc. deferred tax liabilities, non-current (included in Deferred tax liability and other long-term liabilities) increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

PayPal Holdings Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	78,717)	75,803)	70,379)	51,333)	43,332)
Less: Noncurrent deferred tax assets, net	1,310)	547)	142)	396)	224)
Total assets (adjusted)	77,407)	75,256)	70,237)	50,937)	43,108)
Adjustment to Total Liabilities
Total liabilities (as reported)	58,443)	54,076)	50,316)	34,404)	27,946)
Less: Noncurrent deferred tax liabilities, net	25)	186)	75)	89)	109)
Total liabilities (adjusted)	58,418)	53,890)	50,241)	34,315)	27,837)
Adjustment to Total PayPal Stockholders’ Equity
Total PayPal stockholders’ equity (as reported)	20,274)	21,727)	20,019)	16,885)	15,386)
Less: Net deferred tax assets (liabilities)	1,285)	361)	67)	307)	115)
Total PayPal stockholders’ equity (adjusted)	18,989)	21,366)	19,952)	16,578)	15,271)
Adjustment to Net Income
Net income (as reported)	2,419)	4,169)	4,202)	2,459)	2,057)
Add: Deferred income tax expense (benefit)	(811)	(482)	165)	(269)	(171)
Net income (adjusted)	1,608)	3,687)	4,367)	2,190)	1,886)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

PayPal Holdings Inc., Financial Data: Reported vs. Adjusted

Download chart

PayPal Holdings Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	8.79%	16.43%	19.59%	13.84%	13.31%
Adjusted net profit margin	5.84%	14.53%	20.36%	12.32%	12.21%
Total Asset Turnover
Reported total asset turnover	0.35	0.33	0.30	0.35	0.36
Adjusted total asset turnover	0.36	0.34	0.31	0.35	0.36
Financial Leverage
Reported financial leverage	3.88	3.49	3.52	3.04	2.82
Adjusted financial leverage	4.08	3.52	3.52	3.07	2.82
Return on Equity (ROE)
Reported ROE	11.93%	19.19%	20.99%	14.56%	13.37%
Adjusted ROE	8.47%	17.26%	21.89%	13.21%	12.35%
Return on Assets (ROA)
Reported ROA	3.07%	5.50%	5.97%	4.79%	4.75%
Adjusted ROA	2.08%	4.90%	6.22%	4.30%	4.38%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	PayPal Holdings Inc. adjusted net profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	PayPal Holdings Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	PayPal Holdings Inc. adjusted financial leverage ratio increased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	PayPal Holdings Inc. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

PayPal Holdings Inc., Financial Ratios: Reported vs. Adjusted

Download chart

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Profitability Ratio
Net profit margin¹	8.79%	16.43%	19.59%	13.84%	13.31%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	1,608)	3,687)	4,367)	2,190)	1,886)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Profitability Ratio
Adjusted net profit margin²	5.84%	14.53%	20.36%	12.32%	12.21%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Net profit margin = 100 × Net income ÷ Net revenues
= 100 × 2,419 ÷ 27,518 = 8.79%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenues
= 100 × 1,608 ÷ 27,518 = 5.84%

Download chart

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	PayPal Holdings Inc. adjusted net profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Activity Ratio
Total asset turnover¹	0.35	0.33	0.30	0.35	0.36
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Adjusted total assets	77,407)	75,256)	70,237)	50,937)	43,108)
Activity Ratio
Adjusted total asset turnover²	0.36	0.34	0.31	0.35	0.36

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Net revenues ÷ Total assets
= 27,518 ÷ 78,717 = 0.35

² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 27,518 ÷ 77,407 = 0.36

Download chart

Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	PayPal Holdings Inc. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Total PayPal stockholders’ equity	20,274)	21,727)	20,019)	16,885)	15,386)
Solvency Ratio
Financial leverage¹	3.88	3.49	3.52	3.04	2.82
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	77,407)	75,256)	70,237)	50,937)	43,108)
Adjusted total PayPal stockholders’ equity	18,989)	21,366)	19,952)	16,578)	15,271)
Solvency Ratio
Adjusted financial leverage²	4.08	3.52	3.52	3.07	2.82

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Total PayPal stockholders’ equity
= 78,717 ÷ 20,274 = 3.88

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total PayPal stockholders’ equity
= 77,407 ÷ 18,989 = 4.08

Download chart

Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	PayPal Holdings Inc. adjusted financial leverage ratio increased from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Total PayPal stockholders’ equity	20,274)	21,727)	20,019)	16,885)	15,386)
Profitability Ratio
ROE¹	11.93%	19.19%	20.99%	14.56%	13.37%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	1,608)	3,687)	4,367)	2,190)	1,886)
Adjusted total PayPal stockholders’ equity	18,989)	21,366)	19,952)	16,578)	15,271)
Profitability Ratio
Adjusted ROE²	8.47%	17.26%	21.89%	13.21%	12.35%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income ÷ Total PayPal stockholders’ equity
= 100 × 2,419 ÷ 20,274 = 11.93%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted total PayPal stockholders’ equity
= 100 × 1,608 ÷ 18,989 = 8.47%

Download chart

Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	PayPal Holdings Inc. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Profitability Ratio
ROA¹	3.07%	5.50%	5.97%	4.79%	4.75%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	1,608)	3,687)	4,367)	2,190)	1,886)
Adjusted total assets	77,407)	75,256)	70,237)	50,937)	43,108)
Profitability Ratio
Adjusted ROA²	2.08%	4.90%	6.22%	4.30%	4.38%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 2,419 ÷ 78,717 = 3.07%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 1,608 ÷ 77,407 = 2.08%

Download chart

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

PayPal Holdings Inc. (NASDAQ:PYPL)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

PayPal Holdings Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

PayPal Holdings Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)