Shipping options can be handled by paypal
Check out this guide for PayPal for information on shipping
https://www.paypalobjects.com/en_US/ebook/PP_WebsitePaymentsStandard_IntegrationGuide/ProfileAndTools.htmlSkip to "Automatic Calculation of Shipping Charges" that's where shipping begings about halfway though the guide
Both are found under the Profile tab in your paypal account under "# Shipping Calculations
# Shipping Preferences"
To use paypal shipping inside the store admin go to payment modules and disable "Disable IPN price check security "