You’ve heard the grumbling. Every developer has a love-hate relationship with the App Store. For years, the "Apple Tax" was a flat 30%, a number that felt like a punch in the gut for anyone trying to build an indie empire from a garage. Then, in late 2020, things shifted. Apple launched the Apple Small Business Program, dropping their cut to 15% for those making under a million bucks a year.
It changed everything. Sorta.
If you’re running a lean operation, that extra 15% isn't just "nice to have." It’s a whole new engineer. It’s a massive bump in your UA (User Acquisition) budget. It’s the difference between "we’re folding in six months" and "we actually have a runway." But here’s the thing—it isn’t automatic. You have to jump through hoops. And if you mess up the math, Apple will kick you back to the 30% tier faster than you can say "antitrust lawsuit."
The Million Dollar Threshold is Harder Than It Looks
The core rule is simple: if you earned less than $1 million in total proceeds (post-commission) across all your apps in the previous calendar year, you qualify. Sounds easy, right? It's not.
Apple tracks this across your entire developer ecosystem. If you own multiple accounts or have a "significant control" over another entity, they count it all together. They aren't stupid. You can't just spin up five different LLCs to hide your revenue and stay under the cap. They look at the "Associated Developer Accounts." If you’re a majority stakeholder in a studio that’s crushing it, your little side project isn't getting the discount.
Wait. Let’s look at the math for a second.
We’re talking about "proceeds." This is the amount after Apple takes their cut. So, effectively, you can have gross sales slightly higher than a million and still qualify. But the moment you cross that $1 million mark in the current year? The 15% rate vanishes. For the rest of the year, you’re back to 30%. Honestly, it’s a weirdly steep "success tax."
If you make $999,999, you keep roughly $850,000. If you make $1,000,001, your rate for the rest of that year and the following year reverts to 30%. It’s a cliff. A steep, painful cliff that makes some developers actually nervous about growing too fast.
Why Does This Program Even Exist?
Apple didn't do this because they're a charity. Let's be real.
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The Apple Small Business Program was born out of immense political and legal pressure. Epic Games was suing them. Regulators in the EU and the US were breathing down Tim Cook’s neck. By lowering the fee for 98% of developers—who, notably, only account for a tiny fraction of Apple's total App Store revenue—they could claim they were "supporting the little guy" while keeping the big bucks from companies like Netflix, Tinder, and Spotify flowing in at 30%.
It was a brilliant PR move. It silenced a lot of the critics. Most developers aren't Supercell or King. Most developers are people like you, trying to make a living. By giving the 15% break to the vast majority of creators, Apple effectively divided the opposition.
The "Associated Developer" Headache
This is where people get tripped up. Apple defines an "Associated Developer" in a very broad sense.
- If you own more than 50% of another developer account.
- If you have the authority to direct the management of another account.
- If another developer has that same power over you.
You have to disclose all of these. If you try to hide an association and Apple finds out—and they have very sophisticated ways of linking accounts through credit cards, addresses, and IP behavior—you don't just lose the 15% rate. You risk getting booted from the Developer Program entirely. Is it worth it? Probably not.
The paperwork is also a bit of a slog. You have to submit an application. It’s not just a toggle in App Store Connect. You go to their dedicated portal, list your accounts, and wait. If you’re a new developer, you can apply immediately. You don't have to wait for a full calendar year to pass, which is a rare moment of Apple being actually helpful.
Real Talk: The Impact on Your Bottom Line
Let’s talk about what that 15% actually buys you.
Imagine your app does $500,000 in sales. Under the old rules, Apple takes $150,000. You keep $350,000. Under the Apple Small Business Program, Apple takes $75,000. You keep $425,000.
That $75,000 difference is huge.
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You could hire a top-tier freelance UI/UX designer for a total overhaul. You could run a localized ad campaign in Japan or Brazil. You could finally pay yourself a decent salary so you don't have to eat ramen three nights a week. For a small team of two or three people, that extra 15% is the oxygen that keeps the flame alive.
The "App Transfer" Trap
Here is a detail that catches a lot of people off guard. If you buy an app from another developer or transfer an app between accounts, it can mess up your eligibility.
Apple generally says that any app transferred after December 2020 makes you ineligible for the program. Why? Because they don't want people "selling" successful apps to small accounts just to get the lower tax rate. If you are planning on acquiring an app to bolster your portfolio, you need to look at the fine print very carefully. You might find yourself paying 30% on that new acquisition even if your total revenue is still under the million-dollar mark.
It feels unfair. It kinda is. But it’s their house, their rules.
What About the "Other" Stores?
Google eventually followed suit with a similar program for the Play Store. It’s funny how competition works. Once Apple moved, Google had to move.
The difference is that Google’s 15% rate applies to the first $1 million for everyone, regardless of how much they make in total. Apple’s version is an "all or nothing" deal based on your previous year. If you’re a big player, Google gives you a break on your first million; Apple gives you nothing.
This makes the Apple Small Business Program uniquely focused on the "true" small developer. It creates a ceiling. It’s a bit of a psychological barrier. I’ve spoken to developers who are literally afraid to cross the $1M mark because they haven't figured out if their margins can survive the jump back to 30%.
Practical Steps to Get Your 15%
If you haven't done this yet, you're leaving money on the table. Seriously.
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- Audit your accounts. Make sure you know every developer account you have a "controlling interest" in. If you're working with partners, clarify who owns what.
- Check your proceeds. Go into App Store Connect. Look at your "Payments and Financial Reports." You’re looking for the total amount paid to you in the last calendar year.
- The Application. Head over to the Apple Developer portal. Look for the Small Business Program section. You’ll need your Team ID and a list of any associated accounts.
- Wait for the Email. Apple usually takes a week or two to process these. Don't panic.
- Monitor Your Revenue. If you’re getting close to that $1 million mark in the current year, start doing the math. You need to know exactly when that 30% hit is going to land so you can adjust your marketing spend or hiring plans.
Is the Program Good for the Industry?
Some people argue it’s a band-aid on a bullet wound. Critics say the commission should be 15% (or lower) for everyone, across the board. They argue that the 30% rate is an arbitrary number from the software-in-a-box days that doesn't reflect the reality of digital distribution today.
But for the solo dev in a bedroom in Berlin or the three-person team in Austin, the debate is secondary. The reality is that the 15% rate is the current law of the land. It has allowed thousands of apps to stay profitable that otherwise would have withered away. It has fueled the "indie-renaissance" on iOS.
Don't let the corporate drama distract you from the utility. If you qualify, take it. Use that extra margin to make your app better. Better code, better assets, better support.
The Future of App Store Fees
We are living in a time of flux. The Digital Markets Act (DMA) in Europe is already forcing Apple to allow alternative app stores and different payment processing options. In some regions, the Apple Small Business Program is just one of several ways to reduce your costs.
However, many of those alternative payment systems come with their own "Apple fee" (usually around 12% to 27%) plus the payment processor's fee (like Stripe’s 2.9%). When you add it all up, the 15% Small Business Program rate is often the cheapest and simplest way to operate. It keeps your billing integrated, your users feel safe using FaceID to pay, and you don't have to manage a complex third-party payment stack.
Basically, unless you’re doing massive volume or have a very specific reason to bypass Apple’s IAP (In-App Purchase) system, the Small Business Program is the gold standard for staying lean.
Actionable Next Steps
Stop thinking of the App Store commission as an immovable tax. It's a variable cost you can influence.
- Review your association status immediately. If you’ve started a new venture or closed an old one, update your records.
- Plan your growth. If you are at $900k in revenue, consider if a massive December push is actually worth it if it bumps you into the 30% bracket for all of next year. Sometimes, slow and steady growth is more profitable than a sudden spike that triggers the higher rate.
- Leverage the savings. Don't just let that extra 15% sit in the bank. Reinvest it. The program is designed to give you a leg up—use the leg up to build something that eventually does make $10 million a year, where the 30% doesn't hurt as much because you have the scale to handle it.
The Apple Small Business Program isn't a gift. It’s a strategic tool. It’s up to you to use it before the landscape shifts again. And it will shift. It always does.