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Paddle vs Lemon Squeezy: fees, payouts, and the stay-the-merchant third option

These two are the classic Merchant-of-Record matchup for indie SaaS and digital products. Both are good: they become your legal seller so worldwide VAT and sales tax are handled for you, both publish the same 5% + 50c headline, and both are well-liked by founders. Paddle is the older, enterprise-leaning platform; Lemon Squeezy is the developer-loved product now owned by Stripe. This page compares them fairly on fees, payouts, approval, fund-holding and tax - and if what you really want is to stay the merchant and be live today, we point to the third option at the end. Everything below is from each company's own pricing pages, docs and public reviews (July 2026).

The fee stack, side by side

Here the headline is a tie: Paddle publishes "5% + 50c per Checkout transaction" and Lemon Squeezy publishes "5% + 50c", both with no monthly fee. So the base effective rate is the same at every ticket:
ScenarioPaddle (5% + 50c)Lemon Squeezy (5% + 50c)paas.build (3.9% flat)
$9 subscription$0.95 = 10.6%$0.95 = 10.6%$0.35 = 3.9%
$29 subscription$1.95 = 6.7%$1.95 = 6.7%$1.13 = 3.9%
The tie-breaker is the add-ons. Lemon Squeezy stacks extra percentages by scenario on top of the base rate - roughly +1.5% on international cards, +1.5% on PayPal, +0.5% on subscriptions - and charges a payout fee of 0% to US banks, 1% to non-US banks. Paddle keeps a single 5% + 50c but folds in a 2-3% currency-conversion margin when your sale and payout currencies differ, generally does not refund its fee on refunds, and asks you to contact sales for products under $10 - so a $9 plan may not get the standard rate. Net: for a recurring, internationally-sold AI subscription, both realistically land above their 10.6% headline at small tickets. Sources: Lemon Squeezy docs - fees · paddle.com/pricing · Paddle FX margin & refunds

Access and approval

Both gate live selling behind a review, and both are generally more forgiving to individuals and small sellers than a bare acquirer would be - a genuine plus of the MoR model. Paddle runs domain and business verification before you can transact, estimated at 5-7 business days, and rejections are common for brand-new sites with no processing history (one developer documented three rejections over three weeks). Lemon Squeezy reviews new stores too, and since coming under Stripe it directs new merchants toward Stripe Managed Payments onboarding as that product opens up. Either way, plan for a review window rather than an instant switch-on. Sources: Paddle - domain review · first-person rejection account · Lemon Squeezy 2026 update

Fund-holding and payouts

Structurally alike again. Lemon Squeezy holds funds ~13 days before they become payable, creates payouts on the 1st and 15th and pays on the 14th and 28th, above a $50 minimum. Paddle creates payouts on the 1st and sends them by the 15th, above a $100 threshold, with up to 3 working days to land. On both, a sale made early in a cycle can sit for two to three weeks before it reaches your bank. Sources: Lemon Squeezy docs - getting paid · Paddle - when do I get paid

Who owns the money?

Both Paddle and Lemon Squeezy are the legal seller of record - the funds are theirs until payout, on their risk policy, and their brand (or Stripe's, in Lemon Squeezy's case) appears on the customer's receipt rather than yours. That's what makes tax "handled for you", and it's the structural trade. Paddle scores around 4/5 on Trustpilot across 10,000+ reviews but carries severe reports of sudden account closures with funds held 60-180 days. Lemon Squeezy is generally well-regarded by founders, though the same MoR structure applies. Whichever you pick, the point holds: on an MoR it was never your account, and the platform's risk decision is final. Sources: Trustpilot - Paddle · Lemon Squeezy 2026 update (public sources, July 2026; experiences vary)

Tax handling and the Stripe question

The shared strength: as Merchants of Record, both calculate, collect and remit global VAT and sales tax for you - Paddle across 200+ countries and territories, Lemon Squeezy across its supported regions - so you never register for tax abroad. The Lemon-Squeezy-specific consideration is ownership: Stripe acquired Lemon Squeezy in 2024 and is folding it into Stripe Managed Payments, which entered public preview in early 2026. Lemon Squeezy isn't shutting down and there's no announced end date, but the team is building migration paths, so heavy users should plan for an eventual move. If a stable, independent MoR matters to you, that weighs toward Paddle; if being inside the Stripe ecosystem is a plus, it weighs toward Lemon Squeezy. And if tax simply isn't your bottleneck, neither MoR may be the right tool. Sources: paddle.com/pricing · Lemon Squeezy - Stripe Managed Payments

Pick Paddle, pick Lemon Squeezy - or the third option

Pick Paddle if you want the most established, independent MoR with the deepest 200+ country compliance, 24/7 support and enterprise tooling - and you can absorb the FX margin and a longer verification.

Pick Lemon Squeezy if you want the developer-loved product and clean DX, you're comfortable inside the Stripe ecosystem (and an eventual migration to Stripe Managed Payments), and the per-scenario add-ons fit your mix.
Pick paas.build if you'd rather not hand over the merchant relationship at all. You stay the legal merchant, your name is on the checkout, and progressive KYB opens a real account (sandbox + production) the same session - individuals included, no company needed. 3.9% flat - no fixed fee, no payout fee, no per-scenario surcharges, funds on FCA-authorised safeguarded rails. UK, EU and US (US selling also via MoR under our UK entity, or J.P. Morgan acquiring for US companies). Agent-native too: SKILL.md, llms.txt, and an MCP server on the official registry.
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Go live when you're ready - no company needed, 3.9% flat.
FAQ

Is Paddle or Lemon Squeezy cheaper?

The headline is identical: both charge 5% + 50c per transaction with no monthly fee, so on a $9 sale each is an effective 10.6% and on a $29 sale 6.7%. The difference is in the add-ons. Lemon Squeezy layers extra fees on top - roughly +1.5% for international cards, +1.5% for PayPal, +0.5% for subscriptions - while Paddle bundles a 2-3% FX margin on currency mismatches and asks you to contact sales for products under $10. Sources: docs.lemonsqueezy.com and paddle.com/pricing.

Do Paddle and Lemon Squeezy hold your money?

Yes - both are Merchants of Record, so the funds are legally theirs until payout. Lemon Squeezy holds funds about 13 days, creates payouts on the 1st and 15th and pays on the 14th and 28th (min $50). Paddle creates payouts on the 1st and sends by the 15th (min $100), then up to 3 working days to arrive. On an MoR it was never your account. paas.build keeps you the merchant on FCA-authorised safeguarded rails.

Is Lemon Squeezy shutting down after the Stripe acquisition?

Not today, and there is no announced end date. Stripe acquired Lemon Squeezy in 2024 and is folding it into Stripe Managed Payments, which entered public preview in early 2026. Lemon Squeezy keeps operating and is building migration paths, but heavy users should plan for an eventual move to Stripe Managed Payments. If a stable, standalone home matters, weigh that against Paddle's independence - or stay the merchant with paas.build.

What if I want to stay the merchant instead of using an MoR?

Paddle and Lemon Squeezy are both Merchants of Record: they become the legal seller and remit global tax for you, but you give up account ownership and your brand on the receipt. If you'd rather keep your own merchant account, your name on the checkout and same-day funds, paas.build charges a flat 3.9% with no fixed or payout fee across the UK, EU and US. US selling is also available via MoR under our UK entity or J.P. Morgan acquiring for US companies.

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