💳 Payments & Billing Comparison
LemonSqueezy vs Paddle
A detailed comparison to help you choose the right tool for your needs.
Last updated: 2026-01-31
LemonSqueezy
5% + 50c per transaction
Strengths
- + Merchant of record handles VAT, sales tax, and invoicing in every country
- + Built-in affiliate system so your customers can sell for you
- + No monthly fees — you only pay when you make a sale
Weaknesses
- − 5% + 50c per transaction is expensive compared to Stripe's 2.9% + 30c
- − Less customization than building your own checkout with Stripe
- − Checkout and storefront design options are limited
Paddle
5% + 50c per transaction
Strengths
- + Merchant of record means they handle VAT, sales tax, and invoicing worldwide
- + Built-in subscription management with dunning and recovery
- + You never have to file taxes in foreign countries
Weaknesses
- − 5% + 50c is nearly double Stripe's rate
- − Approval process required — they review your business before you can start
- − Less flexibility than Stripe for custom checkout flows
The verdict
Which one is right for you?
Choose LemonSqueezy if you want
- → Merchant of record handles VAT, sales tax, and invoicing in every country
- → Built-in affiliate system so your customers can sell for you
Choose Paddle if you want
- → Merchant of record means they handle VAT, sales tax, and invoicing worldwide
- → Built-in subscription management with dunning and recovery
In depth
About each tool
LemonSqueezy
Sell digital products and subscriptions globally — they handle all the tax compliance
LemonSqueezy is Paddle but friendlier for indie founders. Like Paddle, they act as the merchant of record — they collect the payment, handle all international taxes, and send you a net payout. Unlike Paddle, there is no approval process and no monthly minimum. You sign up and start selling.
The 5% fee hurts on every transaction, but do the math: if you sell $5,000/month, LemonSqueezy costs you $250 in fees. An accountant to handle international VAT filing costs more than that. If you sell exclusively in one country or only in the US, Stripe is cheaper. If you sell globally and do not want to think about tax compliance, LemonSqueezy trades money for sanity.
Paddle
Payment platform that handles global taxes for you — they are the seller, you get paid net
Paddle takes the scariest part of selling software internationally — tax compliance — and makes it someone else’s problem. They act as the merchant of record, which means they are legally the seller. They collect the payment, handle VAT/sales tax in every country, and pay you a net amount. You never file a foreign tax return.
The price for this peace of mind is real: 5% + 50c per transaction versus Stripe’s 2.9% + 30c. For many SaaS founders selling to customers in the EU, UK, and beyond, the math still works out — hiring an accountant or using a tax service would cost more. Paddle requires approval before you can start, so apply early.
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