Fees on the App Store have drawn criticism for years, with some developers labelling it 'The Apple Tax.' This guide covers what it actually costs to sell on the App Store, what alternatives exist, and why you will probably always need the App Store to some extent.
The introduction of the app store was a revolution in the way digital businesses distribute their product.
But when Steve Jobs introduced the App Store SDK, paving the way for third party sellers to develop their own products and sell them through the app store, he added a big caveat.
When we sell the app through the App Store, the developer gets 70% of the revenues right off the top. We keep 30% to pay for running the App Store.”
Steve Jobs, June 2008, Iphone SDK Keynote
It’s a figure that has attracted the interest of legislators. And a fee that some developers have named ‘The Apple Tax’.
The truth is you will (probably) always need to rely on the App Store to some degree, and the app store does provide an integral service for builders, but growth isn't confined to the app stores. This article covers the full fee math, the costs that never appear on any invoice, the hidden value of the App Store, and how web monetization is unlocking 20 - 40% more net revenue for developers globally.
What is the ‘Apple Tax’?
The ‘Apple Tax” is the term some developers use when referring to the fee Apple charges for distribution on the app store. What is that fee? It depends on your revenue.
Scenario | Fee |
|---|---|
Standard App Store IAP | 30% |
Small Business Program (Under $1M ARR) | 15% |
Apple Developer Program Membership | $99/year |
The Small Business Program threshold
Developers earning under $1M annually pay 15% rather than 30%. It applies to cumulative earnings across all affiliated accounts, so spreading revenue across multiple apps does not keep you below the limit.
Once you cross $1M, every sale from that point forward flips to 30% for the rest of that calendar year. Earlier sales at 15% aren't clawed back, but there is a cliff developers should be cautious of.
The hidden App Store costs that don’t appear on an invoice
The commission Apple takes is the visible part, but not the extent of costs. What’s less visible is what you give up by letting Apple mediate every transaction in their Walled Garden.
You do not own the customer relationship
When billing fails, Apple sends a server notification immediately. The problem isn't that you can't know, it's that most apps aren't set up to act on it. Apple retries for up to 60 days, but you can't intervene in that process.
No discount through Apple's system, no pause option, no way to offer a softer landing to a subscriber who's about to lapse. Your only lever is your own channels, a push notification, or an in-app message, if you've built that monitoring in the first place.
Limited customer data
Apple doesn't hand over email addresses, names, or Apple IDs. What you get is transaction data, purchase dates, product IDs, subscription status, plus a pseudonymous subscriber ID that's unique to your app but not linked to anything identifiable.
Unless your users are already logged into your own system, you're managing subscriptions without knowing the people behind them.
No pricing or experimentation control
Inside the App Store, pricing tiers are Apple's, not yours. Natively, Apple gives you no way to A/B test checkout copy, run time-limited discounts for existing subscribers, or offer custom pricing for specific cohorts. On the web, you can ship a pricing change today and have valuable data in a matter of hours.
Extended payouts
Apple pays on a 33-45 day cycle after month end. For a fast-growing app funding customer acquisition through paid channels, that is a working capital problem. You are spending on acquisition today and waiting over a month to see the revenue.
How do apps reduce their App Store fees?
How are leading apps reducing the fees they pay and gaining more control of their product experience? Web monetization refers to apps distributing or monetizing (or both) on the web and has quietly become a core lever many of the world’s top apps pull when growing beyond the app store.
There are two key motions when it comes to web monetization. Most apps doing this well run both. But they are different tools for different problems and regions. Both allow apps to circumvent Apple’s 30% fee.
Web2App starts on the web.
A user finds you through a paid ad on or organic web search, pays via a web checkout, and gets directed into the app.
Apple never sees the transaction. You own the customer from the first click.
This is the preferred method of international sellers or US sellers distributing their app into
App2Web starts in app
A user hits your paywall, taps an external link, completes the purchase on a web checkout, and returns with access unlocked. This is a monetization play for users already inside your app, not a new acquisition channel.
Apps in the US (or selling into the US) can include buttons, external links, or calls to action directing users to web-based payment.
The practical reality for most apps is a hybrid model rather than a wholesale exit from the App Store.
But for subscription upgrades, annual plans, and new user acquisition, external checkout is now a legally protected option in the US.
For developers who route purchases through App2Web or Web2App, the effective platform cost drops from 30% to approximately 5.5%, but the benefits aren’t limited to fees.
Beyond avoiding “The Apple Tax”, the benefits of selling on the web include;
- Enhanced cash flow: 30 days from 60
- Pricing flexibility
- Direct ownership of the customer relationship
- Involuntary and voluntary churn prevention
- Control over UX and direct product enhancement
Tolan, one of the world’s fastest growing consumer AI apps, is using its App2Web flow to feed directly into its product evolution through personalization pre-checkout:
App store vs web monetization cost and fees
How do the costs of staying on the app store compare with the cost of selling on the web?
While many deride the “Apple Tax”, developers should note the backend payment and tax infrastructure Apple handles for their 30% fee.
Global payments: Supporting different payment methods worldwide.
Fraud prevention: Protection against chargebacks and payment fraud.
Subscription management: Handling trial periods, renewals, and cancellations
Global tax compliance: Managing international tax obligations and complexity.
Chargeback disputes and refunds: On the web, apps are responsible for any chargeback disputes and refund management.
Moving to web payments without addressing these backend complexities could create serious operational and legal issues, as Thomas Petit points out in his recent conversation with Andrew Davies.
Yes, you’re gaining more freedom but that comes with responsibilities. Outsourcing these newfound responsibilities with A Merchant of Record (Like Paddle) is a simple work around.
We’ve mapped the costs associated with a Merchant of Record solution against the 30% app store fee.
ARR | Scenario | App Store Fee | You keep | vs Web + MoR |
|---|---|---|---|---|
$500K | Small Business Program | 15% | $425,000 | $472,500 |
$2M | Standard | 30% | $1,400,000 | $1,890,000 |
$5M | Standard | 30% | $3,500,000 | $4,725,000 |
Note this is just the fee math, faster payouts mean revenue is available to reinvest sooner, better attribution data from web conversions tightens your paid acquisition and pricing experimentation that does not require App Store approval cycles compounds over time. None of those benefits appear in a fee comparison tables but create sustainable growth that compounds.
For most, this is a hybrid motion
We do need to add a touch of nuance here.
No matter what you think of Apple’s fees, the truth is you will (probably) always need to rely on the App Store to some degree.
Nothing rivals the platform's distribution capabilities, Apple Features can make an app overnight, and it’s a relatively simple platform to optimize on. App2Web is the best of both worlds, but as of July 2026, we only recommend the motion for developers selling into the US.
Growth beyond the app stores
The fee many dub the “Apple Tax” has frustrated a lot of developers, and for most, monetization on the web makes a lot of sense. But it’s not a copy and paste motion.
The App Store solves a lot of complexity on the backend for the fee you pay, and the App Store's 800 million weekly users aren’t going anywhere anytime soon.
For now, all you can do is experiment. Run web monetization motions compliantly, ensure you’re taking care of payment management, tax compliance, chargeback and fraud management, and find what works best for your business.
To learn more about web monetization, click here.
