How Lemon Squeezy works
Lemon Squeezy is merchant of record. They collect payment, calculate and remit US sales tax and EU VAT, handle customer billing support, and process refunds. You receive net revenue after their fee and the taxes they remit.
They also bundle license key delivery for software, a built-in affiliate program, customer billing portals, and Stripe-grade subscription tools. Designed specifically for indie SaaS, info-product creators, and digital-download sellers.
Fees breakdown
| Component | Cost |
|---|---|
| Per-charge fee | 5% + $0.50 |
| Subscription fee | Same 5% + $0.50 per renewal |
| Payout fees (USD ACH) | $0 |
| Refund processing | Lemon Squeezy absorbs |
| Affiliate program | Included |
| License delivery | Included |
| Customer billing support | Tier-1 handled by Lemon Squeezy |
Built-in features
- Hosted checkout pages with multi-currency display
- Customer billing portal (subscription management, payment methods, invoices)
- Affiliate program (set commission per product, automatic tracking and payout)
- License keys for software downloads, automatic delivery
- Webhooks for product fulfillment, customer events, subscription state changes
- EU VAT invoice generation per customer
- Refund and dunning workflows
Best fit
- Indie SaaS founders at $0-$50K monthly revenue
- Info-product creators (courses, ebooks, templates) selling globally
- Digital downloads (software, plugins, themes)
- Solo or small team operations where tax compliance is a real time sink
- Anyone who wants Stripe-grade subscription tooling without setting up the infrastructure
Setup steps
- Form Wyoming LLC + EIN through WyomingLLC ($397)
- Sign up at lemonsqueezy.com with LLC documents and EIN
- Wait 1 to 3 business days for approval
- Configure products: title, description, pricing, optional license delivery
- Integrate checkout (overlay, hosted, or API)
- Set up affiliate program if applicable
- Configure US bank account for net-30 payouts
When to outgrow
The 5% fee adds up. At $5K monthly revenue, ~$300 in fees. At $50K monthly, ~$2,500. At $100K monthly, ~$5,000.
Beyond ~$100K monthly revenue, Stripe + Stripe Tax + Quaderno (or similar) is typically cheaper while preserving most of the operational convenience. The migration is non-trivial (re-integrating checkout, re-onboarding customers in some cases), so most founders make the switch only when fee delta exceeds ~$2K/month.