Paddle Paid

Paddle is a merchant of record (MoR) for software and SaaS. It acts as the legal seller of your product, so Paddle collects and remits VAT, GST and US sales tax in over 200 territories, handles chargebacks, and pays you the remainder. Standard pricing is 5% plus 50 cents per transaction.

What is Paddle?

Stripe hands you money and leaves tax compliance to you. Paddle sells the thing. On the invoice, Paddle is the merchant; your product is what’s being sold. That distinction matters the first time a German tax office asks for a VAT return covering the last two years.

That legal structure is why indie developers with customers in 30 countries use it instead of a payment gateway plus an accountant.

Paddle product features

• Global tax handling. VAT, GST and US state sales tax are calculated, collected and remitted. You get clean transaction reports for your bookkeeping.
• Subscription and license management. Trials, upgrades, proration, dunning and license keys are built in. Checkout accepts cards, PayPal and local methods.
• Chargeback and fraud liability. As the seller of record, Paddle absorbs disputes rather than you.
• Paddle Billing API. Webhook-driven; integrates with common frameworks and has SDKs for Node, PHP and Python.
• Payouts in multiple currencies. Funds arrive on a schedule after refund and reserve periods.

Product highlights

• One integration replaces a payment processor, a tax engine and a billing subscription service.
• Vendor verification and approval is required before you can take live payments, which filters out some low-effort products.
• Handles VAT invoices with proper business details, something card processors often punt on.

What is Paddle used for?

• Indie SaaS with customers across the EU and UK.
• Desktop app licenses sold as one-time purchases with keys.
• Subscription products that need trials and plan changes without custom code.
• Teams that don’t want to register for VAT in multiple countries.
• Products with high chargeback risk where the MoR shield matters.

Is Paddle free, and what does it cost?

No monthly fee. Paddle takes 5% plus $0.50 per transaction on the standard rate, with custom rates for high volume. Because it’s a percentage, the effective cost on a $9 monthly subscription is close to 10.5%, which is real money at scale.

Skip Paddle if you only sell domestically and already use Stripe Billing; you’d pay twice for billing logic. Large enterprises with a procurement team may also push back on handing sales to a third party, in which case a tax engine like Avalara plus your own gateway is the usual alternative.

Quick Summary

• Paddle is a merchant of record for software, meaning it is the legal seller and the tax remitter.
• Pricing is 5% + $0.50 per transaction with no monthly fee.
• It covers VAT, GST and US sales tax in 200+ territories and absorbs chargebacks.
• Best for cross-border SaaS and licensed desktop software; unnecessary for single-country sellers on Stripe.