Kickstarter Fees: Secrets Every Backer Should Know

Kickstarter is an excellent platform for running a creative crowdfunding campaign. With over $7.6 billion raised for their almost 250,000 projects, this is one of the world’s best and biggest crowdfunding platforms.

If you’re considering launching your campaign on Kickstarter, one big thing to consider is Kickstarter fees. How much do you have to pay the platform to raise funds for your project?

In this guide, we’ll break down everything you need to know.

Key Highlights:
Understanding how much Kickstarter takes in fees.
What types of fees Kickstarter has.
What’s the deal with taxes?
How you can calculate Kickstarter fees fast and right.

What are Kickstarter Fees?

Before we dive deep into the types of Kickstarter crowdfunding fees, let’s talk about the big picture. Since Kickstarter allows you to raise funds for your creative projects and gives you access to millions of monthly visitors, it can’t do this without a price.

Kickstarter charges four different fees, but they’re not as scary as you might think. If you’re scared your project might fail, you don’t have to worry. If your campaign doesn’t reach its goal, Kickstarter won’t collect any fees, which will minimize the risk factors.

Let’s discuss the types of fees you must consider when estimating your goal.

Kickstarter Fee Types

Signup, fundraiser, payment processing, and country-specific fees cover all Kickstarter fees. So, how much does Kickstarter take? Let’s add them up and see.

Signup Fee

Let’s start from the beginning when you sign up for Kickstarter. When we said there is minimal risk with Kickstarter, we meant it. So, are there fees for signing up? The answer is no. The only costs you must worry about are the Kickstarter platform fee and payment processing charges.

Go ahead and sign up, create your project, and test your luck. You won’t have to pay even a dime if your project doesn’t reach its goal.

Fundraiser

Now, let’s talk about Kickstarter fundraising fees. You won’t need to pay a fixed amount if you successfully fund your project. Instead, you’ll have to give the Kickstarter commission fee, which is only 5% of the total amount you raise, considering that you’ve met your goal.

Payment Processor Fees

Aside from the 5% flat fee, you must consider the Kickstarter payment processing fees, usually Stripe. Each payment made by backers will incur a charge for the Kickstarter processing fee.

The payment processing fees in the US are $0.20 + 3% of the total amount someone pledged to your project. For pledges under $10, there is a discounted fee of $0.05 + 5% of the pledge.

Fees per Countries

Payment processing fees may vary from country to country. For example, in the UK, the payment processing fee is 3% of the total pledge plus £0.20 instead of $0.20 for the US.

You can check the country-specific processing fees on Kickstarter.

So, what are the fees for Kickstarter? The total Kickstarter campaign fees are 5% of the total amount you raise if your project meets its goal, plus payment processing fees for each pledge you get (3% + $0.20).

What are the extra fees on Kickstarter?

If you’re wondering about any hidden Kickstarter added fees, your only worry can be taxes. Keep on reading to learn more about Kickstarter fees and taxes.

Kickstarter and Taxes

There can be tax implications when raising funds through Kickstarter since your funds will be considered taxable income. Your tax fees for Kickstarter will vary depending on the nature of your project and your local laws and regulations.

Do Kickstarter fees include sales tax? Sometimes, Sales tax may apply, and fees will not have it. As a rule of thumb, always consult with a tax professional or accountant to understand and fulfill your tax obligations correctly.

Refer to the Kickstarter taxation guide for more information on Kickstarter and taxes.

Rewards Fees

As you may already know, you’ll need to reward your backers in one way or another for their contribution. Usually, this would be the product you’re raising funds for or even a bundle for larger pledges.

This incentive helps backers give away their hard-earned money more efficiently. However, these rewards come with their own set of costs to consider.

Are there fees with Kickstarter rewards? Kickstarter itself doesn’t charge any rewards fees per se. However, you’ll need to remember the materials, production costs, and shipping fees. These will go out of your pocket, so you should factor them into your overall budget and project goal.

Closure

There you have it, folks – the ultimate guide to your Kickstarter project fees to consider, including signup, fundraiser, and payment processor fees.

Let’s recap. What are the Kickstarter fees for your project? You’ll pay a flat 5% commission on the total amount of funds you raise, plus you’ll be charged 3% + $0.20 on each pledge you get.

If you’re not best friends with numbers, you can always rely on a Kickstarter fee calculator to do the deed for you.2

Regarding any hidden fees on Kickstarter, you only need to consider your local tax regulations. Remember that the funds you raise on Kickstarter might be considered taxable income.

We hope this guide has helped you figure out Kickstarter and fees for yourself to set a realistic goal for your upcoming project. We wish you the best of luck in your future campaigns!

FAQ

What do Kickstarter backers get in return?

In return for backing a project, Kickstarter backers are offered rewards or perks from campaign owners. These are usually bundles of products they are raising funds for or some other incentive, such as a discount for the products when the project launches. Other rewards include exclusive merchandise, early bird access, etc.

The campaign owner sets these rewards, and will vary depending on the backer’s pledge amount. If you’re planning on backing a project, read through the project’s page to see the rewards you might get and the amount you’ll need to pledge to get them.

How does Kickstarter pay out?

Kickstarter uses an all-or-nothing funding system, whereby you won’t receive the funds you raise by the campaign’s deadline and won’t be paid at all (even if you’re $1 off). In the same way, if your project doesn’t meet its goal, Kickstarter won’t collect funds from backers.

Payment processors like Stripe usually process the amount of funds you raise. When collecting your funds, you’ll receive them minus the 5% and fees for pledges (3% + $0.20).

Do you have to pay back backers on Kickstarter?

Depending on whether or not your project reaches its goal, you’ll need to pay back your backers in different ways. Remember that when someone backs your campaign, they do so with the understanding that they’re supporting the development and production of it.

If your project doesn’t meet its funding goal, Kickstarter will not charge backers the amount they pledged. However, if your project meets its goal, you’ll need to pay back your backers through the perks and rewards you promised.

Note: Kickstarter doesn’t function as an investment platform, so backers are not entitled to receive financial returns or equity in your project.