Lemon Squeezy vs Polar
Both are finance tools. Here is what separates them.
| Lemon Squeezy | Polar | |
|---|---|---|
| Category | Finance | Finance |
| Pricing model | paid | freemium |
| Price from | Paid | Freemium |
| Upvotes | 16 | 4 |
| What it does | A merchant of record, so sales tax stops being your problem. | Merchant-of-record billing for software, with tax and entitlements handled. |
What Lemon Squeezy is
Lemon Squeezy is a hosted checkout and storefront for selling digital products, software licences and subscriptions. Its defining feature is that it acts as the merchant of record, meaning it takes on the liability for calculating, collecting and paying sales tax and VAT on the seller's behalf rather than leaving that to you. That service is paid for out of each sale. There is no monthly charge for the ecommerce features, and the headline rate is 5% plus 50 cents per transaction, calculated on the total order value and taken when the order is placed. The headline is seldom the whole cost, because surcharges are added on top of it. Transactions made outside the United States add 1.5%. PayPal transactions add a further 1.5%. Subscription payments add 0.5%. A subscription bought through PayPal by a customer outside the United States picks up all three, so the rate on that sale is 8.5% plus 50 cents. Further charges sit outside that rate. A sale that came through an affiliate referral costs the merchant an extra 3%, and the affiliate's payout carries 2%. A payment recovered by an abandoned cart email costs an extra 5%. Payouts are priced separately again: free to a United States bank account through Stripe, 1% per payout to a bank outside the United States, a flat 50 cents for PayPal payouts to United States accounts, and 3% capped at 30 dollars for PayPal payouts elsewhere. Sellers with high transaction volume, fast growth, or products priced below 10 dollars can approach the sales team for custom pricing, which is the route worth taking when the fixed 50 cents is a meaningful share of the price. The selling tools themselves are conventional but complete. Checkout can be embedded on any website or shared as a hosted link, and there is a hosted store front that a custom domain can be attached to. Up to 21 payment methods are accepted, PayPal among them. Licence keys are issued automatically after a sale and can be deactivated and reissued, and download links for digital files are signed and throttled against abuse. Subscriptions bill weekly, monthly or yearly, with upgrades, downgrades, cancellations, free trials and discounts handled by the platform, and per seat and usage-based billing are both available. Card retries and failed payment recovery are built in, and the dashboard reports monthly recurring revenue, refunds and average order value. Email marketing is a separate product with its own pricing: free for up to 500 subscribers, then charged by total subscriber count.
What Polar is
Polar is a billing and payments platform that acts as the merchant of record for the seller. Polar Software, Inc. registers as the reseller in the relevant jurisdictions, so it, not you, collects and remits VAT, GST and US sales tax. EU business-to-business sales with a valid VAT ID are handled under the reverse charge rule. You remain responsible for income tax on your own revenue in your own country. Signing up is free and needs no credit card, but account approval goes through a merchant of record and KYC review that usually takes about a week. What a sale costs is built from several parts rather than a single rate, and the headline percentage falls as the monthly fee rises. Starter has no monthly fee and charges 5 percent plus 0.50 US dollars per transaction. Pro costs 20 US dollars a month and charges 3.8 percent plus 0.40. Growth costs 100 US dollars a month for 3.6 percent plus 0.35. Scale costs 400 US dollars a month for 3.4 percent plus 0.30, and is the only tier with a shared Slack channel and prioritised support. Surcharges then stack on top: cards issued outside the United States add 1.5 percent, cross-border currency conversion costs 0.25 percent within the EU and 1 percent elsewhere, and a dispute or chargeback costs 15 US dollars whatever the outcome. Transaction fees are not returned when an order is refunded, in full or in part. Payouts run through Stripe Connect Express or a manual withdrawal, and Polar never moves the balance automatically. Stripe payouts cost 2 US dollars per month per active payout, plus 0.25 percent and 0.25 US dollars per payout, and Stripe's minimum payout amount per currency means anything below it stays on the balance until next time. More than 130 currencies are supported and checkout picks the currency from the buyer's location, with orders converted to US dollars at the time of the transaction. Unusually for this category, the Polar codebase is open source under the Apache 2.0 licence. Products can be one-time purchases or subscriptions, priced as fixed, pay what you want with an optional minimum, free, metered usage or per-seat, with intervals from daily to yearly. Two decisions are permanent: the billing interval and the pricing type are locked once a product is created, and existing subscribers stay on the price they signed up at when a price changes. Benefits automate delivery of what the customer bought: licence keys, feature flags, file downloads up to 10 GB, private GitHub repository access and Discord invites with roles. There are SDKs for JavaScript or TypeScript and for Python, plus adapters for frameworks including Next.js, Nuxt, SvelteKit, Astro and Laravel. The customer portal is hosted by Polar under your own slug and cannot be switched off, so part of the customer relationship sits on Polar's domain rather than yours.
We are not affiliated with either product. Upvote counts come from the published formula and neither position was paid for.