Merchant of Record vs Self-Tax for Creators
Short answer
A merchant of record is the legal seller at checkout, so that company collects and remits covered sales tax and VAT. Gumroad, Lemon Squeezy and Paddle state they are merchants of record. Payhip collects EU/UK VAT and US/Canadian sales tax without calling itself a full MoR. Kajabi, Systeme.io and Stan leave remittance with you; Stan and Stripe document Stripe Tax as a tool you still file under.
Last checked · Prices from systeme.io (opens in new tab) and kajabi.com (opens in new tab) · how we check
On this page 5 sections
Last checked 30 Oct 2026 · Sources: gumroad.com/pricing, payhip.com/pricing, lemonsqueezy.com/pricing, Lemon Squeezy fees docs, paddle.com/pricing, Paddle MoR help, Paddle VAT help, stripe.com/tax, stripe.com/tax/pricing, stripe.com/pricing, Kajabi Sales Tax overview, Stan sales tax help, Systeme.io VAT help, Systeme.io charge VAT.
Not tax advice. This page summarises what each vendor publishes about who collects and remits tax on digital sales. It does not tell you whether you must register, what rate to charge, or how to file. Rules vary by country, product type and your facts. Talk to a qualified tax professional or your local tax authority before you change how you sell.
What a merchant of record is
In the creator and SaaS checkout world, a merchant of record (MoR) is the company that stands as the seller to the buyer. Paddle’s help centre puts it plainly: as MoR, Paddle acts as reseller / seller on record, so Paddle is responsible for collecting and paying covered VAT and sales tax instead of you for those transactions. Lemon Squeezy’s pricing page says the same in MoR language: it takes on tax collection and calculation liability and pays taxes on your behalf. Gumroad’s pricing page says that since 1 January 2025 Gumroad is your merchant of record and manages sales tax collection and remittance worldwide.
That is different from a payment processor. Stripe processes the card; by default you remain the merchant. Stripe Tax can calculate and collect tax into your Stripe balance and help with registrations and filings on paid Tax plans — you are still the business on the tax return unless you move into a separate MoR product (Stripe’s tax page also describes Managed Payments as a merchant-of-record option).
Who collects and remits (vendor claims)
| Platform | MoR / tax role (vendor wording) | EU / UK VAT | US sales tax | Fee model (published) |
|---|---|---|---|---|
| Gumroad | Merchant of record since 1 Jan 2025 | Handled as part of worldwide MoR tax (pricing page) | Handled as part of worldwide MoR tax | 10% + USD 0.50 direct; 30% Discover; USD 0 monthly |
| Lemon Squeezy | Merchant of record | VAT / sales tax collection and filing as MoR | Sales tax as MoR | 5% + USD 0.50 (processing included in base fee per docs); +1.5% intl / PayPal, +0.5% subscriptions may apply |
| Paddle | Merchant of record / reseller | Collects and remits VAT (and equivalents) where required | Collects and remits sales tax where required | Checkout 5% + USD 0.50; USD 0 monthly on pay-as-you-go |
| Payhip | Collects, reports and remits digital EU/UK VAT and US/Canadian sales tax (does not label itself MoR on pricing) | Digital EU/UK VAT | US (and Canadian) sales tax | Free 5%; Plus USD 29 + 2%; Pro USD 99 + 0%; Stripe/PayPal on top |
| Kajabi (Kajabi Payments) | Calculates and collects via Kajabi Sales Tax; does not file or remit for you | You configure jurisdictions / codes; remittance is yours | Same | Plan + Kajabi Payments card rates (e.g. Basic US 2.9% + USD 0.30 on kajabi.com/pricing); Sales Tax has a separate per-transaction fee (rate not stated on the overview page) |
| Systeme.io | Calculates VAT on order forms when enabled; you connect Stripe/PayPal | Buyer-country VAT on information products (help centre) | Not described as US sales-tax remittance by Systeme.io | 0% platform fee; gateway fees (Stripe US 2.9% + USD 0.30) |
| Stan Store | Automatic tax via Stripe Tax when enabled; you register regions | Available when your Stan location is in supported list (incl. EU/UK) | Collects only in states where you are registered (help centre) | 0% Stan fee; Creator USD 29 / Pro USD 99; Stripe/PayPal processing |
| Stripe Tax (self-tax path) | Calculation / collection tool; you remain seller of record | Supports VAT/GST collection where registered | Supports US sales tax where registered | Tax Basic 0.5% (Checkout/Billing/etc.) or USD 0.50 (API path); Tax Complete monthly tiers for registrations/filings |
Fee trade-off with worked USD examples
MoR checkouts usually bake tax handling into a higher per-sale platform fee. Self-tax stacks keep more of each sale on paper, then add monthly software, Stripe (or Kajabi Payments) processing, and optional Stripe Tax — plus your own registration and filing work.
Assumptions for the keep column: one-time US domestic card sale, product price as listed, buyer-side tax not added, Gumroad Discover off, Lemon Squeezy without intl/PayPal/subscription add-ons, Stripe US 2.9% + USD 0.30 where processing is separate, no Stripe Tax fee layered on (add 0.5% if you enable Tax Basic on Stripe Checkout-style flows).
| Checkout | Published per-sale cost | Keep on USD 10 | Keep on USD 20 |
|---|---|---|---|
| Gumroad direct | 10% + USD 0.50 | USD 8.50 | USD 17.50 |
| Lemon Squeezy | 5% + USD 0.50 | USD 9.00 | USD 18.50 |
| Paddle Checkout | 5% + USD 0.50 | USD 9.00 | USD 18.50 |
| Payhip Free | 5% + Stripe | USD 8.91 | USD 18.12 |
| Stan / Systeme.io / Kajabi Payments (card only) | 0% platform + Stripe or Kajabi Payments | USD 9.41 | USD 19.12 |
100 sales of a USD 10 download (USD 1,000 gross), same assumptions, monthly plan shown separately:
| Path | Fees on 100 sales | Monthly plan | Net before other costs |
|---|---|---|---|
| Gumroad direct | USD 150 | USD 0 | USD 850 |
| Lemon Squeezy / Paddle Checkout | USD 100 | USD 0 | USD 900 |
| Payhip Free | USD 109 | USD 0 | USD 891 |
| Systeme.io Free + Stripe | USD 59 | USD 0 | USD 941 (until Free lifetime sales revenue hits USD 10,000 per Systeme.io terms) |
| Stan Creator + Stripe | USD 59 | USD 29 | USD 912 |
| Kajabi Basic + Kajabi Payments | USD 59 | USD 179 | USD 762 |
If that same Stripe volume also used Stripe Tax Basic at 0.5%, another USD 5 would leave the USD 1,000 example (on Checkout/Billing-style Tax Basic pricing). That still does not buy MoR liability transfer.
Lemon Squeezy’s fees docs show a useful MoR nuance: when a French buyer pays USD 20 + 20% VAT, the platform fee is calculated on the order total including tax, then tax is remitted and you receive the net. Self-tax tools usually charge processing on the charged amount too; the difference is who files the VAT return.
Choosing a path (from published docs, not a test)
This is a reading of vendor pages, not a hands-on audit of your tax position.
- MoR-style checkouts (Gumroad, Lemon Squeezy, Paddle) fit creators who want the platform to be the seller for tax on those sales and who accept a higher published take-rate instead of running registrations themselves.
- Payhip fits if you want Payhip to handle the EU/UK digital VAT and US/Canadian sales tax lines it documents, while still connecting Stripe or PayPal.
- Kajabi / Systeme.io / Stan + Stripe Tax fit if you already need those products for funnels or storefronts and are prepared to register, enable tax settings, and file or remit yourself (or pay Stripe Tax Complete / an accountant for filing help).
Related reading
Frequently asked questions
What is a merchant of record?
Paddle's help centre describes a merchant of record as the reseller or seller on record for the buyer's purchase. That company calculates, collects and remits covered VAT, GST and sales tax, instead of the creator doing those filings for those sales. Lemon Squeezy and Gumroad use the same MoR label on their pricing pages (checked 30 Oct 2026).
Is Gumroad a merchant of record?
Yes. Gumroad's pricing page states that since 1 January 2025 Gumroad is a merchant of record and manages sales tax collection and remittance worldwide. Direct sales are listed at 10% + USD 0.50; Discover sales at 30%.
Is Payhip a merchant of record?
Payhip's pricing FAQ does not use the merchant-of-record label. It states that Payhip automatically collects, reports and remits digital EU/UK VAT and US/Canadian sales tax, and that you can set up other taxes that Payhip reports to you.
Do Kajabi, Systeme.io or Stan Store remit tax for me?
No, not as a merchant of record. Kajabi's help centre says Kajabi Sales Tax calculates and collects at checkout but does not file or remit on your behalf. Systeme.io documents VAT calculation on order forms while you connect Stripe or PayPal. Stan documents tax calculation through Stripe Tax for registered regions; remittance stays with you.
What is Stripe Tax?
Stripe Tax is Stripe's tax product for calculating and collecting sales tax, VAT and GST. Tax Basic is listed at 0.5% per transaction on Billing, Checkout, Invoicing and Payment Links where you are registered, or USD 0.50 per transaction for API / other-processor paths. Tax Complete adds registrations and filings on a monthly plan. You remain the seller of record unless you use a separate merchant-of-record product.
How do MoR fees compare on a USD 20 sale?
On a one-time US card sale with published fees only (buyer tax not modelled): Gumroad direct about USD 17.50 kept; Lemon Squeezy about USD 18.50; Paddle Checkout 5% + USD 0.50 leaves about USD 18.50; Payhip Free about USD 18.12 after Stripe; a 0% platform with Stripe US 2.9% + USD 0.30 leaves about USD 19.12 before monthly plans and before any Stripe Tax fee.
Does MoR mean I never deal with tax?
No. MoR platforms state they handle tax on sales through their checkout in the jurisdictions they cover. Income tax, home-country filings, and sales outside those tools are separate. This page is general information from vendor docs, not tax advice.
Is this a hands-on test?
No. tested is false. Claims and fee maths come from each vendor's published pricing or help pages checked on 30 Oct 2026. Tax amounts charged to the buyer are not modelled in the keep figures.