Payhip Free Plan’s 5% Fee vs Plus: The $967 Break-Even

Payhip will let you open a store for digital products, courses, memberships, and coaching for exactly $0 a month — and then take 5% of every sale you make, forever, unless you pay to lower that cut. The Plus plan costs $29 a month and drops the fee to 2%. The Pro plan costs $99 a month and drops it to 0%. So the only question that matters is: at what monthly sales level does paying actually save you money? The answer is $967 a month for Plus, and $3,500 a month for Pro. I worked that math out myself below, because some popular guides get the first number wrong, and the difference is worth real money.

Here is the short version if you are in a hurry. If you sell less than about $967 a month, stay on the free plan. Between $967 and $3,500, Plus is cheapest. Above $3,500, Pro wins. On every plan, your payment processor — Stripe or PayPal — still charges its own fee on top, usually around 2.9% plus $0.30 per transaction. That processing fee is the same on all three plans, so it does not change which plan wins, but it does change how much you actually keep. Keep reading for the full tables, the comparison with Gumroad, Stan Store, and Etsy, and the tax catch that matters more than the fee.

Payhip’s pricing is unusual — and that is the point

Most software pricing works like this: pay more, get more features. Payhip works the other way around. Every plan — Free, Plus, and Pro — includes the same features. Unlimited products, unlimited revenue, a storefront builder, a course builder, memberships, coaching bookings, physical products, affiliate tools, coupon codes, and a basic email tool for messaging past buyers. You are not paying for tools when you upgrade. You are paying to lower your transaction fee. That is a strange model until you think about who it serves: a seller whose only real cost question is “how much of each sale do I keep?”

Here are the plans as they stand in October 2026:

No credit card is required to start on the free plan, and there is no time limit on it. It is a working store, not a trial. That matters for beginners, because the biggest risk with a new digital product is not the fee — it is building something nobody buys. Payhip lets you find out for free.

The catch, and there is always one, is that “5%” is not your total cost. On a $50 sale on the free plan, Payhip takes $2.50, and Stripe or PayPal takes roughly $1.75 (2.9% of $50 is $1.45, plus $0.30). Your real cost is $4.25, or 8.5% of the sale — not 5%. Even on Pro, where Payhip takes nothing, you still pay the processor on every sale. Any guide that quotes only the platform fee is understating your cost, so every table in this article shows the platform fee first and then reminds you processing sits on top.

The break-even math, worked out properly

This is the original math I promised, and it is simple enough to check on a phone calculator.

Free vs Plus. Plus costs $29 a month and saves you 3 percentage points per sale (5% down to 2%). Divide $29 by 0.03 and you get $966.67 — call it $967 a month in sales. Below that, the free plan’s 5% costs less than $29 plus 2%. Above it, Plus wins.

Plus vs Pro. Pro costs $70 more than Plus ($99 vs $29) and saves you 2 percentage points (2% down to 0%). Divide $70 by 0.02 and you get $3,500 a month. Below that, Plus is cheaper. Above it, Pro is cheapest.

Here is what that looks like in platform fees alone, before processing:

Two things jump out. First, the Plus crossover is razor-thin at $1,000 — Plus wins by a single dollar — so do not upgrade the month you cross $967 if your sales are bumpy. Wait until you are consistently above it for two or three months, because a quiet month on Plus costs you $29 whether you sell or not, while a quiet month on Free costs you nothing. Second, Pro’s advantage grows fast once you pass $3,500: at $10,000 a month, Pro saves you $130 over Plus and $401 over Free. That is real money, and it is the whole reason the tier exists.

Now, a correction worth making, because I found it in more than one guide while researching this piece: some sources claim Plus starts paying for itself at around $580 a month in sales. That number does not survive the arithmetic. At $580, Free costs $29 (5% of $580) and Plus costs $40.60 ($29 plus 2% of $580) — Free is still cheaper by $11.60. The $580 figure appears to come from dividing $29 by 5% instead of by the 3-point difference, which is the wrong calculation. The correct crossover is $967, and you can verify it in ten seconds: 3% of $967 is $29.01. Trust the division, not the roundup.

What you actually keep on a single sale

Monthly tables hide what a single sale feels like, so here is the per-sale math for a $25 product — say a Lightroom preset pack — across Payhip and its closest rival, Gumroad.

On Payhip’s free plan, a $25 sale costs $1.25 to Payhip plus about $1.03 to the processor (2.9% is $0.73, plus $0.30), for $2.28 in total fees. You keep about $22.72, and the money lands in your own Stripe or PayPal account right away.

On Gumroad, the same $25 sale costs $2.50 (10%) plus $0.50, plus the same ~$1.03 in processing, for $4.03 in total fees. You keep about $20.97, and Gumroad holds payouts on a weekly schedule behind a $100 payout minimum. That is $1.75 less per sale on Gumroad, on a product that only costs $25. At 80 sales a month, the gap is $140 a month, or $1,680 a year — and that is on Payhip’s free plan, before you even touch Plus.

Scale it up and the story gets stronger for Payhip. At $2,000 a month in sales, Payhip’s free plan costs $100 in platform fees, Plus costs $69, and Gumroad costs roughly $200 plus $0.50 per transaction on top. At $5,000 a month, Payhip Pro costs $99 flat, while Gumroad’s 10% costs $500 before per-sale fees. The fee gap is the single biggest reason sellers switch, and it is also why Gumroad’s pitch has to be about something other than price — which brings us to the comparison that actually matters.

Payhip vs Gumroad vs Stan Store vs Etsy

Fees are only half the decision. The other half is who handles the messy parts: tax, payouts, disputes, and finding buyers. Here is how the four main options stack up in October 2026.

Gumroad: simplest, most expensive, tax fully handled. Gumroad charges a flat 10% plus $0.50 per sale through your own links, plus card processing, and 30% flat (processing included) for sales through its Discover marketplace. There is no paid tier that lowers the fee — 10% is 10% whether you sell $100 or $100,000. What you get for that premium is real: Gumroad has been the merchant of record since January 2025, meaning it is the legal seller, files sales tax and VAT wherever it sells, and handles card disputes for you. It also has Discover, a built-in marketplace that can send buyers to new creators with no audience. If you hate paperwork and have no audience, that combination is genuinely valuable, and it is the one honest argument for paying double Payhip’s fee.

Stan Store: flat monthly fee, zero platform cut, no free plan. Stan’s Creator plan is $29 a month ($300 a year) and Creator Pro is $99 a month ($948 a year), with 0% transaction fees on both. Card processing still runs through your own Stripe or PayPal. At $1,000 a month in sales, Stan Creator ($29) actually beats Payhip Plus ($49) on fees alone. The trade-offs: there is no free plan, only a 14-day trial, and Stan collects tax only in regions where you are registered — the rest is on you. Stan fits creators who sell from a social bio and already have traffic; it is a link-in-bio storefront first and a full store second.

Etsy: the only one with built-in buyers. Etsy charges $0.20 per listing (renewing every four months), 6.5% of the order total, payment processing that varies by country, and Offsite Ads of 15% — or 12% if you made at least $10,000 on Etsy in the past year — capped at $100 per order when a sale comes from an Etsy ad shown elsewhere. That fee stack can easily beat Payhip on a single sale, but Etsy is the only option here where buyers actually search for products. If you have no audience, no email list, and no following, Etsy is where your first sales will come from, and the fee is the price of that discovery. Many experienced sellers use Etsy for discovery and Payhip for their own audience — the two are additive, not rivals.

Payhip: cheapest at scale, but you are the seller. Payhip is not a merchant of record. It collects and remits EU and UK VAT for you, and since July 1, 2026 it also handles US and Canadian sales tax — but payments run through your own Stripe or PayPal account, so chargebacks, refunds, and tax obligations everywhere else remain your responsibility. That is the real price of the low fee, and it is the thing most fee comparisons skip. If you sell software, sell in many countries, or want usage-based billing with tax fully handled, a full merchant of record removes more work than Payhip’s lower fees save. If you sell ebooks, templates, and courses mainly to US, EU, and UK buyers, Payhip’s tax coverage is probably enough.

For a deeper look at Gumroad’s side of this comparison, see our Gumroad fees guide for 2026, our Etsy vs Payhip fee math for digital downloads, and our sales-tax guide for digital products.

The tax catch, in plain English

Let me slow down on tax, because this is where a beginner can get hurt. When you sell a digital product to a buyer in another country, somebody owes that country’s VAT or sales tax. On Gumroad, that somebody is Gumroad. On Payhip, for EU and UK buyers, Payhip collects and remits the VAT for you. For US and Canadian buyers, Payhip has handled sales tax since July 1, 2026. For buyers anywhere else, and for any tax question beyond those regions, you are on your own — and because the money went through your Stripe or PayPal account, a chargeback lands on you too, not on Payhip.

None of that makes Payhip a bad choice. It makes it a choice for sellers who are comfortable being the business, not just the creator. If you are selling your first $200 template pack to friends and followers, this is a footnote. If you are selling $5,000 a month to buyers in twenty countries, talk to an accountant before you pick a platform on fee alone. This article is not tax advice — tax rules change, and your situation is your own — but the direction of the advice is simple: the cheaper the platform fee, the more of the business you are running yourself.

One more practical advantage of Payhip’s model is worth naming: payouts are instant, because the money never sits with Payhip. It goes straight to your Stripe or PayPal account, so you are not waiting for a weekly payout or a $100 minimum to clear. For a small seller, cash flow timing matters as much as the fee percentage, and instant beats weekly when rent is due.

Who should pick which plan

Start on Free if: you are launching your first product, you have no proven sales yet, or you sell under $967 a month. There is no downside to testing here. Every feature is included, so you are not building a store you will have to rebuild later.

Move to Plus if: you have sold over $967 a month for two or three months in a row. At that point the $29 is buying you a real discount, not a hope. Set a calendar reminder to check every quarter: if you slip back under $967 for a sustained stretch, drop back to Free. Downgrading costs nothing but pride.

Move to Pro if: you are consistently above $3,500 a month. At $5,000, Pro saves $30 a month over Plus and $151 over Free. At $10,000, it saves $130 over Plus. The only reason to stay on Plus above $3,500 is if your sales are spiky and you expect a quiet quarter — in that case, the flat $99 hurts more in a bad month than the 2% helps in a good one.

Skip Payhip if: you need a built-in audience (use Etsy), you need full global tax handling and dispute cover (use a merchant of record like Gumroad or Lemon Squeezy), you need an API for custom integrations (Payhip does not offer one), or you sell mainly through a social bio and want the simplest possible storefront (Stan Store is worth a look). None of those are failures of Payhip. They are just different jobs, and picking the wrong tool for the job costs more than any fee percentage.

If you want a visual walkthrough of the three-way fee comparison, this Gumroad vs Stan Store vs Payhip video comparison covers the same $1,000-a-month math with on-screen examples.

A simple switching checklist

If you are already selling somewhere else and thinking about moving, do it in this order so you do not lose sales mid-migration. First, open the Payhip store on the free plan and list one product — do not migrate everything on day one. Second, connect your Stripe or PayPal account and buy your own product to confirm the checkout, the download delivery, and the payout landing in your account. Third, set up your custom domain if you have one (included on all plans, where some rivals charge for it) and point your main buy links at Payhip for new traffic only. Fourth, watch one full month of fees against the tables above before you touch Plus or Pro. Fifth, only then move your back catalog, and keep the old store live until every old link has been redirected. A migration done in an afternoon is how download links break and buyers email you at midnight. A migration done over a month is boring, and boring is profitable.

My bottom line is the same as the math. Payhip’s free plan is genuinely free to start and genuinely 5% forever — that “forever” is the part to respect. It is a great deal at $300 a month and a bad deal at $5,000 a month, and the only thing separating those two sentences is whether you upgrade at $967 and $3,500. Write those two numbers on a sticky note, check your sales every quarter, and let the fee take care of itself.

Frequently Asked Questions

How much does Payhip charge in 2026?

Payhip has three plans with identical features: Free ($0 a month, 5% per sale), Plus ($29 a month, 2% per sale), and Pro ($99 a month, 0% per sale). Stripe or PayPal processing fees of around 2.9% plus $0.30 apply on top of every plan.

At what sales level should I upgrade from Payhip Free to Plus?

At about $967 a month. Plus saves 3 percentage points per sale versus Free, and $29 divided by 0.03 is $966.67. Below that, Free is cheaper; above it, Plus wins. Wait for two or three consistent months above $967 before upgrading, since Plus charges $29 even in a quiet month.

When does Payhip Pro become cheaper than Plus?

At $3,500 a month in sales. Pro costs $70 more than Plus and saves 2 percentage points, and $70 divided by 0.02 is $3,500. Above that level Pro is the cheapest plan; at $10,000 a month it saves $130 over Plus.

Is Payhip cheaper than Gumroad?

Yes, on fees at every volume. Gumroad charges a flat 10% plus $0.50 per sale plus processing, with no tier that lowers the fee. On a $25 product, Payhip’s free plan keeps about $22.72 versus about $20.97 on Gumroad. Gumroad’s advantage is different: it is a merchant of record that handles global tax and disputes, and its Discover marketplace can bring you buyers.

Does Payhip handle sales tax?

Partly. Payhip collects and remits EU and UK VAT, and US and Canadian sales tax since July 1, 2026. It is not a full merchant of record, so payments run through your own Stripe or PayPal account and chargebacks, refunds, and tax obligations in other regions remain your responsibility. This is not tax advice — check the rules for your own situation.

Can I sell courses, memberships, and physical products on Payhip?

Yes. All plans include the same features: digital downloads, courses, memberships, coaching bookings, and physical products, plus affiliate tools, coupon codes, and a basic email tool. Upgrading only lowers your transaction fee; it does not unlock extra features.

Fee figures in this article were cross-checked against Payhip’s official pricing page and independent reviews, including InflowPay’s Payhip review and SoloBuild’s Gumroad vs Stan Store vs Payhip guide. Prices change — recheck Payhip’s pricing page before committing a catalog to any plan.