How do I know if PayPal email is legit?
A genuine email from PayPal would also address you by name and not start with 'Dear Customer'. Logging into your account direct and not clicking on any link in the email is the safest way to check what is going on (if anything). Don't reply or open any attachments, and if in doubt contact PayPal to be 100% sure.
Does PayPal ever contact you by email?
That being said, PayPal will NEVER: Send an email asking you to confirm or supply sensitive information such as a password, banking information or debit/credit card data. Send an email containing any attachments. Send an email asking you to download or install software.