Stripe vs Lemon Squeezy / Paddle

At a glance

1. The sticker price is one of four meters you will pay

Stripe's pricing page prints one number: 2.9% + 30¢ for a domestic card. A subscription business pays that plus three more.

None of those lines is hidden. Each one has its own page, which is how a 2.9% product becomes a 3.6% + 80¢ product by the end of the month.

2. A merchant of record sells a different invoice, not a cheaper one

Lemon Squeezy and Paddle both publish 5% + 50¢ per transaction and $0 per month. They also publish the same sentence in different words: they are the seller.

That moves who owns the tax question. On Stripe you are the merchant, so the VAT number, the filing deadline and the penalty for missing it are yours. On either merchant of record the receipt carries their name and you receive a net payout.

• Lemon Squeezy: 5% + 50¢ per transaction, $0 monthly, and sales tax or VAT collection where it is the merchant of record, with the liability taken on.
• Paddle: 5% + 50¢ per Checkout transaction, no monthly fee, and custom pricing for products under $10.
• Neither fee moves when you add a country to your tax map. That is the product.

The question is not which percentage is smaller. It is whether the extra points cost less than the paperwork you would otherwise do yourself.

3. At $20 a month the assembled stack loses by $20

Take 1,000 subscribers at $20, all domestic cards, $20,000 of volume, and assume you are registered to collect tax everywhere you sell. If you are not, the Tax line is smaller and the Stripe stack cheaper.

Move the price to $100 and keep the same $20,000: Stripe bills $580 + $140 + $160 = $880, the merchant of record bills $1,000 + $100 = $1,100. The crossover is one equation: 3.6% × P + 80¢ = 5% × P + 50¢, so 1.4% × P = 30¢, and P = $21.43.

4. International-card fees remove this modeled crossover

1.5% for an international card turns 3.6% + 80¢ into 5.1% + 80¢. The modeled gap against 5% + 50¢ is 0.1% × P + 30¢, always positive. Correction: the earlier $300 crossover used the wrong sign.

The third row is the one people miss. A euro customer paying with a euro card costs 6.6% + 80¢, which is more than the fee that supposedly includes filing for thirty countries. Currency conversion is charged on top of the international card fee, so both can land on one charge.

5. What the extra points buy, and what they take

For the fee you get fraud screening, chargeback handling, buyer support and the remittance itself. Paddle lists payments, subscriptions, tax, fraud protection and billing support inside the 5%. Lemon Squeezy lists the same set and states the liability plainly: it takes on tax collection and pays the taxes on your behalf.

The cost is control:

• You do not hold the merchant account, so the acquirer relationship and the risk decision are theirs.
• Refund and chargeback conversations belong to their support queue, not yours.
• Leaving means moving subscribers, and Paddle sells that as a migration service rather than a button.

Stripe's answer is Tax Complete, which monitors thresholds, registers in 90+ countries and files returns. It is priced in tiers by registrations, transactions and filings, and the tiers are a quote rather than a number on the page.

6. Where each one breaks

Stripe breaks at the first country you sell into without registering. Tax Basic tells you the tax is due and meters 50¢ once you are registered; it does not register you, and back taxes plus penalties appear on no price sheet.

The merchant of record breaks on the fixed fee. 50¢ is 5.6% of a $9 product, so a $9 sale keeps $8.05 before hosting. Paddle's own FAQ routes products under $10 to custom pricing, which is the same admission in a politer sentence.

It breaks again at the top, because 5% never thins out. A $200,000 month split into 1,000 charges of $200 pays $10,000 + $500 on a merchant of record and $7,200 + $800 on the assembled stack, a $30,000 gap across a year.

Price three things before you choose: your average charge, the share of cards that are not domestic, and whether anyone on the team has filed a VAT return.

Cost arithmetic at volume

These are computed from the published unit prices, not measured. Each row prints its own formula, so you can replace our assumption with your traffic and redo it.

Decision matrix

Rows are the situation you are actually in. Pick the row before you read the pricing page again.

Code and configuration

// Stripe: you are the seller, so the tax switch is yours to get wrong.
import Stripe from "stripe";
const stripe = new Stripe(process.env.STRIPE_SECRET_KEY);

const session = await stripe.checkout.sessions.create({
  mode: "subscription",
  line_items: [{ price: process.env.PRICE_20_MONTHLY, quantity: 1 }],
  automatic_tax: { enabled: true }, // 50¢ per transaction once registered
  customer_update: { address: "auto" },
  success_url: "https://app.example.com/ok?session={CHECKOUT_SESSION_ID}",
  cancel_url: "https://app.example.com/pricing",
});
// Breaks when: automatic_tax is on and you never registered in the buyer's country.
// No tax is collected, the liability stays yours, and the invoice still looks right.

// Paddle: the tax never becomes your line item, but the webhook is the billable event.
import { Paddle, Environment } from "@paddle/paddle-node-sdk";
const paddle = new Paddle(process.env.PADDLE_API_KEY, {
  environment: Environment.production,
});

const transaction = await paddle.transactions.create({
  items: [{ priceId: process.env.PRICE_20_MONTHLY, quantity: 1 }],
  customData: { account_id: "acc_123" },
});
// Breaks when: you grant access from this response. The transaction is not the
// subscription; only the subscription webhook says the 5% + 50¢ was collected.
return transaction.id;

What you gain, what you give up

Migration path

Common questions

Sources & verification

Prices and limits were read from these pages on 2026-11-10. Vendor marketing claims are quoted as claims. Anything derived is arithmetic on the numbers below.

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