First of all lets get you updated with the new builds of eStore and the affiliate plugns. You can download them from here:
http://support.tipsandtricks-hq.com/update-request
Once you update please do a test transaction and let us know if you see a difference.
"Is the Paypal commission charges taken out before the division of commission paid to the affiliate?" - No, the affiliates do not care about the fees and charges you incur. For example, when you see a product selling for $50 and the commission for that is 50% then you as an affiliate expect to get $25.
Obviously you don't want to incur losses so what you do is instead of offering a 50% commission you offer a 45% commission which takes care of that issue and the affiliate will not have any more question.