Copyright © 2023, Quiller Media, Inc.
Contact Us | Privacy Policy
The App Store is a powerful digital ecosystem.
AppleInsider may earn an affiliate commission on purchases made through links on our site.
The App Store has an enormous reach, enabling developers to access billions of users. But, there is confusion on how much Apple charges — and on what.
The 30% fee on App Store purchases is often criticized because it’s also the only way most apps can accept payment on Apple devices. So, to what exactly does Apple’s fee apply, and to what does it not?
App Store fees
On the iOS, iPadOS, watchOS, and macOS App Store, Apple charges a 30% fee for apps and in-app purchases. However, the fee doesn’t apply to free apps.
Subscriptions are charged at 30% for the first year, which then drops to 15% for subsequent years.
Developers can also apply for the App Store Small Business Program. Under this scheme, if your business makes $1 million or less in a year, you qualify for a reduction of the fee to 15%.
Once your business income surpasses this threshold in a given year, the standard 30% rate applies for the rest of the year. However, if your income drops below $1 million, you can re-qualify for the scheme the following year.
Things for which App Store fees don’t apply
App Store fees only apply to digital goods and services, so this excludes physical goods, such as ordering on the Amazon app, food from DoorDash deliveries, and tangible services like Uber rides.
However, there are some interesting specifics. As is normally the case, the devil is in the detail, but so is salvation… if you’re lucky.
That’s because Apple has made a series of concessions over the years, either of its own volition or due to legal compulsion.
Exceptions and counter-exceptions
Paid boosts to social media posts incur the in-app purchase fee, but apps for the sole purpose of buying and managing advertising campaigns do not.
Additionally, “reader” apps — those used to consume previously purchased content such as news, books, music, and video — are also exempt from App Store fees on that content.
The weird case here is for game streaming apps, such as Google’s Stadia and Microsoft’s Xbox Cloud Gaming. Technically, they are allowed on the App Store without the subscription incurring a fee, but there are some difficult hoops through which you’d need to jump.
The main one is Apple’s stipulation that “Each streaming game must be submitted to the App Store as an individual app so that it has an App Store product page, appears in charts and search, has user ratings and review…”
That’s a lot of work, even if you have the rights to do so for every game.
Alternative payment processing
Following some high-profile lawsuits, Apple must allow developers to surface alternative payment methods to users in certain countries, which circumvents some proportion of Apple’s fee.
So far, the only country where this policy change has been universally applied is South Korea, where developers can now use their own in-app payment system. But Apple will still take a 26% cut, and you’ll probably still need a payment processor.
If you happen to be releasing a dating app in the Netherlands, you may be in luck: In this specific case, Apple must also give you the option of using an alternative payment processor, in exchange for a mere 27% fee.
Apple has been granted a temporary stay from a ruling forcing it to allow alternative payment methods in the United States. However, this is a changing legal situation so don’t rely on this just yet.
Then there’s Europe to consider, with its Digital Markets Act that aims to force Apple into allowing third-party payments and alternative app marketplaces, a situation Apple is apparently working to prepare for when it eventually becomes an issue sometime in 2024.
Apple’s full and current guidelines, including where its App Store fees do and don’t apply, can be found here.
The 30% fee on App Store purchases is often criticized because it’s also the only way most apps can accept payment on Apple devices. So, to what exactly does Apple’s fee apply, and to what does it not?
On the iOS, iPadOS, watchOS, and macOS App Store, Apple charges a 30% fee for apps and in-app purchases. However, the fee doesn’t apply to free apps.
Subscriptions are charged at 30% for the first year, which then drops to 15% for subsequent years.
Developers can also apply for the App Store Small Business Program. Under this scheme, if your business makes $1 million or less in a year, you qualify for a reduction of the fee to 15%.
Once your business income surpasses this threshold in a given year, the standard 30% rate applies for the rest of the year. However, if your income drops below $1 million, you can re-qualify for the scheme the following year.
App Store fees only apply to digital goods and services, so this excludes physical goods, such as ordering on the Amazon app, food from DoorDash deliveries, and tangible services like Uber rides.
However, there are some interesting specifics. As is normally the case, the devil is in the detail, but so is salvation… if you’re lucky.
That’s because Apple has made a series of concessions over the years, either of its own volition or due to legal compulsion.
Paid boosts to social media posts incur the in-app purchase fee, but apps for the sole purpose of buying and managing advertising campaigns do not.
Additionally, “reader” apps — those used to consume previously purchased content such as news, books, music, and video — are also exempt from App Store fees on that content.
The weird case here is for game streaming apps, such as Google’s Stadia and Microsoft’s Xbox Cloud Gaming. Technically, they are allowed on the App Store without the subscription incurring a fee, but there are some difficult hoops through which you’d need to jump.
The main one is Apple’s stipulation that “Each streaming game must be submitted to the App Store as an individual app so that it has an App Store product page, appears in charts and search, has user ratings and review…”
That’s a lot of work, even if you have the rights to do so for every game.
Following some high-profile lawsuits, Apple must allow developers to surface alternative payment methods to users in certain countries, which circumvents some proportion of Apple’s fee.
So far, the only country where this policy change has been universally applied is South Korea, where developers can now use their own in-app payment system. But Apple will still take a 26% cut, and you’ll probably still need a payment processor.
If you happen to be releasing a dating app in the Netherlands, you may be in luck: In this specific case, Apple must also give you the option of using an alternative payment processor, in exchange for a mere 27% fee.
Apple has been granted a temporary stay from a ruling forcing it to allow alternative payment methods in the United States. However, this is a changing legal situation so don’t rely on this just yet.
Then there’s Europe to consider, with its Digital Markets Act that aims to force Apple into allowing third-party payments and alternative app marketplaces, a situation Apple is apparently working to prepare for when it eventually becomes an issue sometime in 2024.
Apple’s full and current guidelines, including where its App Store fees do and don’t apply, can be found here.
I’ve never had a problem with Apple’s 30% fee. This is nothing when comparing it to a regular store’s up-charge over what they pay for their “products.” I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software.
rob53 said:I’ve never had a problem with Apple’s 30% fee. This is nothing when comparing it to a regular store’s up-charge over what they pay for their “products.” I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software.Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an “authorized dealer” program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the “gray market,” where warranty and other concerns are called into question.
You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple’s adversarial relationship with developers in the App Store. You don’t have to agree with me whether or not that’s a problem, nor am I trying to convince anyone here that’s a problem, but when the snide Apple White Knights rush to defense of a
two trillionone trillion dollar company and declare developers “chintzy” for not toeing the line, it’s hard not to roll my eyes. There’s nuance in every relationship. I don’t disagree that Apple provides a valuable service to end users with how they’ve structured the App Store. I disagree that it’s worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves.
Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an “authorized dealer” program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the “gray market,” where warranty and other concerns are called into question.
You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple’s adversarial relationship with developers in the App Store. You don’t have to agree with me whether or not that’s a problem, nor am I trying to convince anyone here that’s a problem, but when the snide Apple White Knights rush to defense of a two trillion one trillion dollar company and declare developers “chintzy” for not toeing the line, it’s hard not to roll my eyes. There’s nuance in every relationship. I don’t disagree that Apple provides a valuable service to end users with how they’ve structured the App Store. I disagree that it’s worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves.
Sometimes I wonder if Apple critics understand market forces. Apple charges exactly as much as possible without diminishing returns (developers abandoning the platform because they’re losing money). That is the American business model. It’s also most of the world’s business model. It’s called Capitalism.
Developers should use Web sites if they want free distribution and avoid all taxes by Apple. If you are making native iOS apps with iAP or subscription ,you should abide by Apple rules. Or you should make your app free, like you know millions of apps on the App Store
neoncat said:rob53 said:I’ve never had a problem with Apple’s 30% fee. This is nothing when comparing it to a regular store’s up-charge over what they pay for their “products.” I keep seeing a note in the window of a health food store that give customers a 30% discount over list price when buying in bulk, in other words, their wholesale price. This wholesale price still gives the store owner enough money to operate their store sho I continue to wonder why these chintzy developers keep complaining about a standard fee. They simple want all the money for themselves. All they have to do is charge more for their software.Common in retail arrangements like you describe is the ability for the producer (the company that creates the product sold) to not only choose which retailers they want to feature their product, but to set minimum (and maximum) advertised markups. Apple does this quite deliberately, for example, setting different markups for different retailers (Amazon, for example). Apple also has an “authorized dealer” program where specific stores are granted direct access to products and marketing support. Other stores are not afforded such blessings, and are instead referred to as the “gray market,” where warranty and other concerns are called into question.
You understand here how the power is ultimately in the hands of the producer. Now compare that to Apple’s adversarial relationship with developers in the App Store. You don’t have to agree with me whether or not that’s a problem, nor am I trying to convince anyone here that’s a problem, but when the snide Apple White Knights rush to defense of a
two trillionone trillion dollar company and declare developers “chintzy” for not toeing the line, it’s hard not to roll my eyes. There’s nuance in every relationship. I don’t disagree that Apple provides a valuable service to end users with how they’ve structured the App Store. I disagree that it’s worth the cost and/or that developers receive value on their end as well. But again, we can agree to disagree. Just do so fairly and acknowledge your desire to represent your own selfish needs, the same way a developer wishes to do for themselves.To sit on the shelf in any store Walmart, Macy’s, Kroger’s Costco, Sam’s Club you have to pay the fees or you don’t get to be in their store, What is the problem? Yes Apple is very successful, but they definitely are small part of the total computer market.
To sit on the shelf in any store Walmart, Macy’s, Kroger’s Costco, Sam’s Club you have to pay the fees or you don’t get to be in their store, What is the problem? Yes Apple is very successful, but they definitely are small part of the total computer market.
Apple is now on its second round of developer betas, with fresh builds of iOS 16.3, iPadOS 16.3, tvOS 16.3, and watchOS 9.3 downloadable by developers.
Apple has become the target of another class action lawsuit over privacy, one claiming the iPhone maker has conducted "systemic violations" of wiretapping, privacy, and consumer fraud laws.
Apple has shared a pair of new ads highlighting the iPhone 14's new stabilization feature and iOS 16's ability to unsend messages sent via iMessage.
Apple's 2022 update to the iPad Pro lineup introduces its newest Apple Silicon chip to its tablet range. Here's how the latest iPad Pro models compete against Apple's 2021 generation.
Microsoft's Surface Pro 9 updates the Windows tablet with both Intel and ARM options, in a form that competes directly with Apple's iPad Pro lineup. Here's how the rival tablets square up.
The redesigned entry-level 10.9-inch iPad is closer to the iPad Air than ever. Here's how they compare.
Microsoft's Surface Laptop 5 is a thin and powerful Windows notebook in the same market segment as Apple's MacBook Air. Here's how the two compare.
The Bose QuietComfort Earbuds II offer all of the comforts of noise-cancellation in a wireless package similar to the new AirPods Pro 2. Here's how the two flagship earbuds stack up.
Kuo: First MacBook with OLED display could launch in 2024
Apple may be designing its own Apple Watch MicroLED screen
Samsung's Galaxy Unpacked event is on February 1
Apple Silver Link Bracelet long-term review – with Apple Watch Ultra
Deals: save $50 on every Apple Watch Ultra
Xfinity Stream app adds long-overdue AirPlay functionality
Apple issues second developer beta for iOS 16.3, iPadOS 16.3, tvOS 16.3, watchOS 9.3
Apple seeds second developer beta for macOS Ventura 13.2
Apple is now on its second round of developer betas, with fresh builds of iOS 16.3, iPadOS 16.3, tvOS 16.3, and watchOS 9.3 downloadable by developers.
Apple has become the target of another class action lawsuit over privacy, one claiming the iPhone maker has conducted "systemic violations" of wiretapping, privacy, and consumer fraud laws.
Apple has shared a pair of new ads highlighting the iPhone 14's new stabilization feature and iOS 16's ability to unsend messages sent via iMessage.
In our long-term review of the iPhone 14 Pro, we differentiate between Apple's marketing machine and nice-to-have features.
The new ProDock is Brydge's take on a vertical docking station that delivers the power of Thunderbolt 4 to both MacBook Pro and MacBook Air.
The iPhone 15 Ultra is a bit less than a year away, but reports are already pouring in about what to expect. Here's what the rumor mill thinks is coming, and a first glance at what it may look like.
Details are key in spotting a fake set of AirPods or AirPods Pro. We picked up a set of widely available clones and compared them to genuine AirPods Pro so you can better protect yourself from getting scammed by counterfeit Apple earbuds.
Apple's iOS 16 makes the iPhone more customizable than ever. This is the ultimate guide on how to make the iPhone a more personal device.
Apple's stainless Silver Link Bracelet is an exceptional Apple Watch band and a great Apple Watch Ultra companion.
TickTick is a robust productivity app that got its start in 2013, and it's built to be used with the Pomodoro and Eisenhower Matrix techniques.
With over 55,000 reviews and proudly bearing the Editor's Choice badge in the iOS App Store, Structured is an attractive choice for essential day planning with an uncluttered design making it intuitive and easy to use.
Usually, MacBook Pro chargers are not the most exciting accessories, but Zeus plans to change that with the Zeus 270w Wall Charger.
The Lion Prowler Energy Power Bank is more than your typical power source, thanks to its rugged construction and illuminating features.
AppleInsider is one of the few truly independent online publications left. If you love what we do, please consider a small donation to help us keep the lights on.
If you love AppleInsider and want to support independent publications, please consider a small donation.
Follow us on Social Media:
{{ title }}