How to account for paypal commisions

This is quite a common accounting scenario and is explained in detail here.

In a nutshell you setup a bank account called “PayPal”, pay the invoices in full to that account. Then you would tag the NET amount (less commission) received from PayPal as a transfer to this PayPal bank account and the difference you enter as money out and tag as a supplier payment to a PayPal. After doing this the PayPal account should balance at zero and the invoices marked as fully paid, without needing to fudge the amounts on the invoices.

Hope that helps, although let us know if you need any further guidance.