Merchant of record for SaaS, priced against Stripe
Paddle, Polar, Lemon Squeezy, Creem, Dodo Payments and Gumroad compared against staying on Stripe and filing your own VAT, with the dollar difference at real revenue levels.
| Service | Plan at 10,000 users | 1,000 users | 10,000 users | 100,000 users |
|---|---|---|---|---|
| StripeThe default PSP. You stay the merchant, so sales tax and VAT stay yours. | Standard3 Aug 2026 | $21 | $214 | $2,140 |
| CreemMerchant of record at a flat 3.9%, aimed squarely at indie SaaS. | Standard3 Aug 2026 | $24 | $236 | $2,360 |
| PolarMerchant of record built for developers, with paid tiers that cut the rate. | Pro3 Aug 2026 | $32 | $270 | $2,420 |
| Dodo PaymentsMerchant of record covering 220+ countries at 4% + 40¢. | Standard3 Aug 2026 | $26 | $258 | $2,580 |
| PaddleMerchant of record — Paddle is the seller and files the tax. | Standard3 Aug 2026 | $30 | $300 | $3,000 |
| Lemon SqueezyMerchant of record for digital products, now owned by Stripe. | Standard3 Aug 2026 | $30 | $300 | $3,000 |
| GumroadMerchant of record with a storefront attached, at a flat 10%. | Standard3 Aug 2026 | $50 | $500 | $5,000 |
Change any of those assumptions in the calculator.
Where this actually starts
A merchant of record becomes the legal seller of your software. It takes the customer’s money in its own name, works out the VAT or sales tax due in their country, collects it, files it, and sends you the rest.
That costs about two percentage points more than Stripe. Whether that is expensive depends entirely on a question that has nothing to do with payments: how many tax jurisdictions you are willing to register in.
What actually separates them
What you are actually buying
Not payment processing — Stripe does that, and these providers mostly run on Stripe underneath. You are buying somebody else’s name on the invoice and somebody else’s liability for the tax. Selling a $30 subscription to a customer in Sweden means 25% Swedish VAT is owed to Sweden. As merchant of record, that is their problem. On Stripe, it is yours.
The rates have converged
Paddle, Lemon Squeezy and Polar all sit at 5% + 50¢. Dodo is 4% + 40¢, Creem 3.9% + 40¢. Gumroad is 10% and is a storefront rather than infrastructure. Polar is the only one that cuts the rate on paid tiers — 3.8% at $20/mo, 3.6% at $100/mo — which pays for itself around $1,400/mo of sales.
International cards add more than you expect
Nearly everyone adds around 1.5% on non-domestic cards, and a merchant of record exists precisely because you are selling internationally. The calculator defaults to 30% of revenue on international cards for that reason; the true figure for a globally sold product is often higher.
Lemon Squeezy is now Stripe
Stripe acquired it in 2024. It still operates and still charges 5% + 50¢, but if your reason for choosing a merchant of record was to not depend on Stripe, that reason no longer applies here.
Which to pick
| If | Then |
|---|---|
| US customers only, for now | Stripe — sales tax in a few states is a much smaller job than global VAT, and you keep two points. |
| Selling worldwide, want the cheapest published rate | Creem at 3.9% + 40¢, or Polar’s paid tiers once you are past roughly $1,400/mo. |
| Selling worldwide, want the most established | Paddle — the highest rate here, and the longest record of actually handling audits. |
Questions
Do I really owe VAT on digital sales to the EU?
Yes, from the first euro — there is no small-seller threshold for non-EU businesses selling digital services into the EU. This is the entire reason the merchant-of-record category exists. Whether anyone comes looking is a different question from whether it is owed.
Can I switch later?
You can, and the subscription migration is the painful part rather than the integration. Moving live subscriptions between processors means re-collecting payment details or arranging a card-network migration. Choosing on rate alone and planning to switch at scale usually costs more than it saves.
