This article is applicable if you are on Patreon’s founders pricing of a 5% platform fee. If you are on our new creator plans and pricing, which were introduced on May 7th 2019, please see this article.
In this article, we will go over:
- Fees on Patreon as a founding creator
- How to opt into the payment processing rates
#2 Payment processing fees
Payment processing fees cover the cost of Patreon’s robust payments architecture, plus the fees our payment processors charge each time they process a successful pledge or refund. Payment processors charge a percentage of the transaction amount plus a fixed number of cents per transaction. Your payment processing fees will vary based on your tier amounts (results in the pledge amounts charged), your patrons’ method of payment (i.e. - card or PayPal), and VAT.
Shared patronage can reduce your processing fees. Shared patronage is when you have patrons in common with other creators on Patreon. To provide an optimal patron experience, Patreon processes all of a patron’s pledges on one transaction each month and delivers one receipt to the patron. The creators included in the one transaction benefit from sharing the transaction fee.
Tier amount can increase or decrease your effective processing rate due to the fixed fee component. While the fixed fee varies due to patron payment method and shared patronage, it can be as high as 30 cents per transaction. We generally recommend keeping your lowest tier priced above $1.00 to avoid a high processing fee effective rate.
Another way to look at it: If you have many patrons with small pledge amounts, then processing fees will be a larger percentage of your overall earnings. If you have just a few patrons with large pledge amounts, then processing fees will be a smaller percentage of your overall earnings.
Finally, Value-Added Tax (VAT) can increase your processing fees.
Patreon is legally required to collect VAT from European Union (EU) patrons. This is a tax charged on top of your tier amount if the patron is located in an EU country. Payment processors charge fees on the transaction amount, which includes tax if Patreon collected VAT. While you as the creator don’t have to worry about collecting VAT from your EU patrons, it can affect your effective payment processing rate. Learn more about VAT collection.
To learn about these fees, please visit this help center article.
How do I opt into the new payment processing rates that were launched to new creators on May 7th, 2019?
If you’d like to know how to compare your founder’s plan rate to the new creator plan rates, you can get an approximation by following these steps:
- Click on Patrons in the navigation bar to the left, then select Relationship Manager.
- Select Active patrons in the drop down menu under Membership types and download a CSV of your active/paid patrons
- For all pledges $3 or less, apply 5% + 10 cents
- For all pledges over $3, apply 2.9% + 30 cents
- Sum all calculated payment processing fees
- Compare sum to current payment processing fee total on the Earnings dashboard
- If sum is larger than the amount on the Earnings dashboard, then the new rates are likely not better.