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I have my Nexus5 set up to automatically back up my images to Google photos. On my phone there are 2 options for backing up photos:

High quality

Great visual quality at reduced file size (free unlimited storage)

Original

Full resolution that counts against your quota

I am currently using the High quality setting.

I decided to perform a spot check of a photo on my phone vs. the same photo online:

  • Phone - file size 1.71MB
  • Online - file size 1.18MB

Then I compared the stats of the photos in Windows explorer - both are identical:

enter image description here

How is Google reducing the file size for the backed up photo?

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    Google Photo limits the photo resolution to 16 megapixels and video resolution to 1080p. This means that it makes the images smaller. In terms of resolution(amount of pixels). Apart from that, in order to store vast amounts of images on its servers, it converts the images to a format that uses less space with the same information. I believe they are using webp internally. Although when you download your photo back, they convert it to jpg again
    – dimitrieh
    Jan 26, 2016 at 8:45

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Google will be resampling the image using a higher level of compression (which your stats don't show). The quality of the image is likely to decrease slightly, although whether this is noticeable to most people is another matter.

The "quality" (a scale of 1 lowest to 100 highest) factor is part of the JPEG algorithm. Reducing the "quality" increases the effective compression. Applied intelligently, small reductions in the "quality" (at the upper end) can result in significant savings in file size without any changes in the perceived image. This generally works OK with photographs, which is the intended image type.

Also, if your images are larger than 16mp then Google will reduce the physical size of the image to 16mp. See Choosing a storage size.

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