# What is Challenge fee?

> A challenge fee is the one-time price a trader pays to start a prop firm evaluation; some firms refund it with the first payout, others never do.

- Source: https://pipvalley.com/glossary/challenge-fee
- Publisher: PipValley - web design studio for prop trading firms
- Updated: 2026-10-03

In a prop firm, the challenge fee is the main revenue line. It is priced by account size and program type, and it is usually non-refundable once trading starts, subject to the firm's refund policy and local consumer law.

A refundable fee is returned to the trader, typically with the first or a later payout from the simulated funded account. It is a strong conversion lever because it reframes the fee as a deposit for good traders, but it is a real cost: the refund is paid only to traders who already cost you a payout.

Add-ons change the effective fee: higher profit split, no time limit, bi-weekly payouts, or a news trading allowance, each for a surcharge. Discount codes and affiliate commissions reduce what the firm actually keeps, so net fee, not list price, is the number to model.

## Why it matters

Your fee is the input to every unit economics calculation: pass rate, payout ratio, acquisition cost and refund liability all hang off it. On the site, state what the fee buys, whether and when it is refunded, and what each add-on costs, in the same block as the price. Hidden conditions on refunds produce chargebacks.