Have you ever been tipped $1, only to check your Paypal later and realize it’s almost half that? That’s because Paypal takes a fee out of every transaction. Every single tip that someone sends to you, a portion of that gets taken by Paypal. It’s approximately $0.30 + 2.9% of the amount received. It may not seem like much but it can really add up! TwitchAlerts just added the ability for donors to cover the Paypal fee in their donation. So when someone tips you $1, you’ll actually get $1 if the donor selects the checkbox at the bottom of the tipping page labeled “I want the pay the processing fee for [streamer].” The donor will be charged a bit more, should they choose this option, but the streamer will get to keep more thanks to it. 

Source: TwitchAlerts April 16 Patch Notes