Guides
Newsletter platform fees: how to work out your net payout
Work out what a paid newsletter actually pays you: the net payout formula, two worked examples and the revenue level where a flat platform fee wins.
What to take away
- A paid newsletter's payout is gross subscription revenue minus processing, any revenue share and the flat platform fee.
- A revenue share costs nothing in a month with no sales and grows with every sale. A flat fee costs the same every month.
- At a 10% share against a 99 dollar flat plan, the two cost the same at 990 dollars of monthly subscription revenue.
- Payment processing applies to both models, so it never decides between them, but it always lowers the payout.
- A free trial that rolls into a paid plan falls under the FTC's negative option rules.
- Keep your suppression and unsubscribe record before any move, because the CAN-SPAM duties stay with you.
The payout formula
Your payout is what is left of gross subscription revenue after processing, any revenue share and the flat platform fee. Write the formula once and reuse it for every quote. Fees are only one of the things a platform comparison weighs, and this sum covers the money alone.
- Gross subscription revenue
- G
- Payment processing rate
- r (as a decimal)
- Revenue share, if any
- s
- Monthly platform fee
- P
Net before tax is G - (G × r) - (G × s) - P. A percentage platform sets P to zero and s to its share. A flat platform sets s to zero and P to its monthly price. Everything else in the sum stays the same, so the comparison is quick once you know G.
Add your email service provider if it is separate, your domain, and any design or migration help you buy. Those costs sit outside the formula but inside the real bill.
Worked example: 500 readers at five dollars
At 500 paying readers on a five dollar plan, G is 2,500 dollars a month. A 10% revenue share plus 3% processing leaves roughly 2,175 dollars before the platform fee.
Net revenue by model
- 2175Percentage model
- 2326Flat model
On a flat 99 dollar plan with no revenue share, the same list nets about 2,326 dollars. Processing is identical on both sides, so the whole difference is the revenue share against the flat fee.
Worked example: 200 readers at eight dollars
Only paying readers enter G. A list of 4,000 subscribers with 200 paying readers at eight dollars a month gives 1,600 dollars. The free part of the list adds no revenue, though most platforms price on contact count, so it can still cost money.
- Percentage platform10% revenue share (160 dollars) plus 3% processing (48 dollars). Platform fee zero. Net 1,392 dollars.
- Flat platform99 dollar monthly plan, no revenue share, plus 48 dollars processing. Net 1,453 dollars.
- Gapthe flat plan nets more, because 160 dollars of share is more than the 99 dollar fee.
Run the same three lines with your own P, r, s and G before you commit.
Where the two models cross
A revenue share and a flat fee cost the same when the share of revenue equals the monthly fee. At a 10% share against a 99 dollar plan, that is 990 dollars of monthly subscription revenue. Below that line the flat plan costs more. Above it, the percentage plan does.
| Monthly subscription revenue (G) | 10% share costs | Flat plan costs | Cheaper |
|---|---|---|---|
| Below 990 dollars | Under 99 dollars | 99 dollars | Percentage plan |
| 990 dollars | 99 dollars | 99 dollars | Equal |
| 1,600 dollars | 160 dollars | 99 dollars | Flat plan |
Substack takes 10% of subscription revenue plus payment processing, so it sits on the percentage side. Ghost, Kit and Mailchimp charge a flat monthly rate on their paid tiers and leave your revenue alone. Beehiiv takes a share on some plans, so read the plan before you run the sum.
Divide the flat fee by the share rate to find your own crossover. Compare it with last month's G, not with the revenue you hope for. The break-even point of the whole business, including your hours, is a separate sum.
Processing sits outside the platform fee
Payment processing applies on every option, whether the platform takes a cut or not. It never decides between two quotes, but it always lowers your payout. Stripe processing in the US commonly runs 2.9% plus 30 cents per successful charge, with higher rates for international cards.
The examples above round it to 3% and leave out the per-charge part, so real payouts sit slightly lower. Check your processor's current rate and put it in for r. On a subscription business processing scales with revenue rather than with list size, so it grows exactly as G does.
Before you switch: the records that stay yours
CAN-SPAM applies to commercial email whoever sends it. The FTC compliance guide for business sets out the requirements, and a fee comparison ends where a migration of the list begins:
CAN-SPAM compliance checklist
- Accurate from, to and reply-to lines
- Non-deceptive subject line
- Physical postal address in message
- Clear opt-out
- Honor opt-out within ten business days
Under the FTC's CAN-SPAM compliance guide, hiring another company to handle your email marketing does not let you contract away your legal responsibility to comply. The cheaper platform is not cheaper if the record of who opted out is lost on the way.
Ask three things before you move the list, and keep the answers with your CAN-SPAM checklist:
- Does the platform expose your sending domain?
- Do suppression lists survive a migration?
- Who holds the unsubscribe record if you leave?
Trials, upsells and auto-renew billing
A free trial that rolls into a paid plan is a negative option offer, and the rules bind the seller. In the FTC's ROSCA recap, the law bans online negative options unless the seller does three things:
- discloses all material terms before collecting billing details
- gets express informed consent before the first charge
- gives a simple way to stop recurring charges
State law can add to this. If you sell a paid tier with a trial, the same rules bind you. If a platform bills you on auto-renew, you are the consumer, and the cancellation path should be findable without a support ticket.
Common questions
How do I find where a revenue share stops paying off?
Divide the flat monthly fee by the share rate. A 99 dollar plan against a 10% share crosses at 990 dollars of monthly subscription revenue. Compare that figure with your own G from last month, since only paying readers count toward it.
Does processing change which model is cheaper?
No. It applies to both options and scales with revenue, so it lowers each payout by the same amount. In both worked examples the processing line is identical on each side, which is why the formula treats the platform fee and the share as the only differences.
Which numbers do I need before asking for a quote?
Gross subscription revenue, your processor's rate, any revenue share and the monthly fee. With those four the formula gives your payout under each plan in a minute. For what changes in distribution and list ownership when you move, see the distribution guide.
