Who Pays the Sales Tax? Digital Product Platforms Compared (2026)
Some platforms collect and pay VAT and sales tax for you. Others hand you a calculator and leave the filing to you. Here is which is which.
If you do not want to register for VAT or file sales tax yourself, pick a platform that collects and pays it for you: Lemon Squeezy, Gumroad, or Payhip. On Shopify and Sellfy, the tax is your job; the tools only help you calculate it.
Who handles the tax, platform by platform
Scroll the table sideways to see every column.
| Platform | Collects and pays tax for you? | What the platform says | Fee on a $20 sale |
|---|---|---|---|
| Lemon Squeezy | Yes | Merchant of record; tax and VAT collection included | $1.50 |
| Gumroad | Yes | Merchant of record; handles sales tax worldwide since January 2025 | $2.50 + processing |
| Payhip | Yes | Pays EU/UK VAT as your reseller; US and Canadian sales tax as a marketplace facilitator | $1.00 + processing (Free plan) |
| Sellfy | No | “Sellfy is not considered the Merchant of Record”; you report and pay tax yourself | Processing only ($29+/month plan) |
| Shopify | No, by default | “Tax is your responsibility”; Shopify Tax can calculate it and offers automated filing in some cases | Processing + monthly plan |
Why this matters more than the fee
- Selling digital products to buyers in the EU or UK usually means VAT is due where the buyer lives, even on a $5 sale.
- In the US, many states tax digital goods, and each has its own threshold and filing rules.
- On a platform that pays the tax for you, none of this lands on your desk. On one that does not, you may need to register, file, and keep records in several places.
That is why a few percent extra can be the cheaper option for a solo creator. Sellfy’s own help page puts it this way: platforms that collect and remit tax do it “at a cost”.
How to choose
- You sell to buyers worldwide and want no tax admin: Payhip, Lemon Squeezy, or Gumroad. Payhip Free has the lowest fee of the three on most prices. See Payhip plans (affiliate link).
- You already have an accountant and a store: Shopify or Sellfy can work, and you keep more per sale at higher volume.
- You are unsure: start on a platform that handles tax. Moving later is easier than fixing missed filings.
Compare what you keep at your own price in the digital product fee calculator.
Sources: Payhip tax page, Lemon Squeezy pricing, Gumroad’s fees, Sellfy: Merchant of Record, Sellfy: Collecting taxes, Shopify Help Center: taxes. This is a cost comparison, not tax advice.
Related: Lemon Squeezy vs Payhip · Shopify vs WordPress for digital products · Payhip Review
Not sure which platform fits your numbers? Put in your price and monthly sales and see what you keep on every platform at once. If you are just starting, a Payhip store costs $0 until you sell, so you can set it up first and decide later.
