Apple has been criticised in recent months over its App Store commissions. The company has stood firm, but now it has announced a new program that lowers the commission rate for most developers.
The App Store Small Business Program
Dubbed the App Store Small Business Program, the new initiative will see the Cupertino company introduce a reduced 15% commission rate for all developers who earn less than $1 million from the App Store.The new commission rate will be implemented come January 1, 2021. It applies to all paid app purchases, in-app purchases, and subscription fees. Until now, Apple only charged a 15% commission on recurring subscriptions after the second year.
Developers who earned under $1 million in 2020 can qualify for the new Small Business Program for 2021. Additionally, new developers that launch apps on the App Store next year can also qualify.
For future years, developers that earn under $1 million in the previous calendar year will qualify. Worth noting is the fact that Apple calculates the total earnings after taking its commission, not before.
If an app developer exceeds $1 million in earnings before the year ends, it will revert back to the standard 30% commission rate. In other words, Apple doesn’t promise a flat commission rate of 15% for the entire year.
The good news is that if a developer falls back below the $1 million threshold in the following calendar year, in this case 2022, it can re-qualify for the 2023 Small Business Program.