Self-Host n8n on a VPS

Zapier costs $30/month for 750 task runs. Make is cheaper but still per-task. Both make perfect sense until your automations start firing thousands of times — then the math flips hard. n8n is the open-source workflow tool that ends per-task pricing forever: same visual node-based editor, 400+ integrations, but you host it yourself and pay $7.99–$35.99/month for a VPS regardless of how many tasks run.

This guide deploys n8n with a PostgreSQL backend (not SQLite — Postgres survives restarts and scales), sets up Nginx with HTTPS for incoming webhook URLs, hardens the dashboard behind auth, and configures backups. The architecture, decisions, and gotchas matter more than the install commands — which is why this guide spends time on encryption keys, webhook URLs, and the 'why not SQLite' question that breaks more self-hosted n8n setups than anything else.

1. When self-hosting n8n actually pays off

Run the numbers before committing:

Tasks per month	Zapier	Make	Self-hosted n8n on OliveVPS
Under 500	Free or $30/mo	Free or $9/mo	$7.99/mo (Starter VPS)
2,000–5,000	$50–$100/mo	$29/mo	$7.99–$15.99/mo
10,000+	$150–$300/mo	$50–$200/mo	$15.99–$35.99/mo
100,000+	$500+/mo	$300+/mo	$35.99/mo (Premium VPS)

The break-even is around 1,000–2,000 monthly tasks. Below that, Zapier's polish wins. Above that, self-hosted is dramatically cheaper — and you control the data, can run AI-heavy workflows with no per-token markup, and don't worry about platform policy changes.

2. Prepare the VPS

apt update && apt upgrade -y
apt install -y curl ca-certificates gnupg ufw

ufw allow 22/tcp
ufw allow 80/tcp
ufw allow 443/tcp
ufw --force enable

adduser n8n
usermod -aG sudo n8n
rsync --archive --chown=n8n:n8n ~/.ssh /home/n8n

3. Install Docker

install -m 0755 -d /etc/apt/keyrings
curl -fsSL https://download.docker.com/linux/ubuntu/gpg | \
  gpg --dearmor -o /etc/apt/keyrings/docker.gpg

echo "deb [arch=$(dpkg --print-architecture) signed-by=/etc/apt/keyrings/docker.gpg] \
  https://download.docker.com/linux/ubuntu $(. /etc/os-release && echo "$VERSION_CODENAME") stable" | \
  tee /etc/apt/sources.list.d/docker.list > /dev/null

apt update
apt install -y docker-ce docker-ce-cli containerd.io docker-compose-plugin
usermod -aG docker n8n

If you're new to Docker, our Docker setup tutorial covers daemon hardening.

4. Deploy n8n with Postgres

This is the most important section. Most n8n tutorials use SQLite — fast to set up, terrible for production. Workflows get corrupted on power loss, the file locks under load, backups are awkward. Use Postgres from day one.

Switch to the n8n user and create the project directory:

su - n8n
mkdir -p ~/n8n
cd ~/n8n

# Generate a random encryption key — this encrypts credentials at rest
# Save this somewhere safe! Losing it = losing all stored credentials.
ENCRYPTION_KEY=$(openssl rand -hex 32)
echo "ENCRYPTION_KEY=$ENCRYPTION_KEY" > ~/.n8n-secrets
chmod 600 ~/.n8n-secrets
echo "Saved your encryption key to ~/.n8n-secrets — back it up off the VPS!"

Create compose.yaml:

services:
  postgres:
    image: postgres:16-alpine
    container_name: n8n-postgres
    restart: unless-stopped
    environment:
      POSTGRES_USER: n8n
      POSTGRES_PASSWORD: CHANGE_THIS_TO_STRONG_PASSWORD
      POSTGRES_DB: n8n
    volumes:
      - ./postgres-data:/var/lib/postgresql/data
    healthcheck:
      test: ["CMD-SHELL", "pg_isready -U n8n"]
      interval: 5s
      timeout: 5s
      retries: 10

  n8n:
    image: docker.n8n.io/n8nio/n8n:latest
    container_name: n8n
    restart: unless-stopped
    depends_on:
      postgres:
        condition: service_healthy
    ports:
      - "127.0.0.1:5678:5678"
    volumes:
      - ./n8n-data:/home/node/.n8n
    environment:
      # Database
      DB_TYPE: postgresdb
      DB_POSTGRESDB_HOST: postgres
      DB_POSTGRESDB_PORT: 5432
      DB_POSTGRESDB_DATABASE: n8n
      DB_POSTGRESDB_USER: n8n
      DB_POSTGRESDB_PASSWORD: CHANGE_THIS_TO_STRONG_PASSWORD

      # Encryption (use the value you generated above)
      N8N_ENCRYPTION_KEY: "PASTE_YOUR_ENCRYPTION_KEY_HERE"

      # Public URL — critical for webhook URLs
      N8N_HOST: n8n.example.com
      N8N_PROTOCOL: https
      N8N_PORT: 5678
      WEBHOOK_URL: https://n8n.example.com/

      # Timezone
      GENERIC_TIMEZONE: UTC
      TZ: UTC

      # Logging
      N8N_LOG_LEVEL: info

Edit both POSTGRES_PASSWORD entries to match (use the same strong password), paste your encryption key into N8N_ENCRYPTION_KEY, and replace the domain. Then start:

docker compose up -d
docker compose logs -f

First boot takes ~30 seconds. When you see Editor is now accessible via: http://localhost:5678/, it's up.

5. Nginx reverse proxy + HTTPS

sudo apt install -y nginx certbot python3-certbot-nginx

sudo tee /etc/nginx/sites-available/n8n <<'EOF'
server {
    listen 80;
    server_name n8n.example.com;

    client_max_body_size 16M;   # Allow larger webhook payloads

    location / {
        proxy_pass http://127.0.0.1:5678;
        proxy_set_header Host $host;
        proxy_set_header X-Real-IP $remote_addr;
        proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
        proxy_set_header X-Forwarded-Proto $scheme;
        proxy_http_version 1.1;
        proxy_set_header Upgrade $http_upgrade;
        proxy_set_header Connection "upgrade";
        proxy_read_timeout 600s;
        proxy_send_timeout 600s;
    }
}
EOF

sudo ln -s /etc/nginx/sites-available/n8n /etc/nginx/sites-enabled/
sudo nginx -t && sudo systemctl reload nginx
sudo certbot --nginx -d n8n.example.com

Visit https://n8n.example.com — n8n's setup wizard greets you. Create the owner account (this is the admin). Pick a strong password.

6. Build your first workflow

Click + Add Workflow. n8n's editor is the visual node graph that made Zapier famous, but more powerful.

Drop a Schedule Trigger node (fires on cron) → HTTP Request node (calls an API) → IF node (branches on condition) → Slack node (posts a message).

Click Execute Workflow to test. Each node lights up green/red showing exactly what data flowed through. Active toggle → it runs on schedule.

For 400+ pre-built integrations: search the node palette. Notable ones: Gmail, Slack, Discord, Telegram, Sheets, Notion, Airtable, Postgres, MySQL, Stripe, OpenAI, Anthropic, HuggingFace, plus generic HTTP/Webhook/Cron for anything that doesn't have a dedicated node.

7. Public webhooks

n8n's killer feature for integrations: every workflow gets a public HTTPS webhook URL. Stripe events, GitHub Actions triggers, Discord bot callbacks — anything that can POST to a URL becomes a workflow trigger.

Drop a Webhook node into a workflow. n8n generates two URLs:

• Test URL — only fires when the workflow editor is "listening" (used during development)
• Production URL — fires whenever the workflow is Active

The URL format is https://n8n.example.com/webhook/<uuid>. This is why we set WEBHOOK_URL correctly in the compose file — n8n needs to know its own public hostname.

If you misconfigure the webhook URL early on and create workflows with the wrong URL embedded, you'll have to manually update each one after the fact. Get this right before you build anything important.

8. Backups and credential security

Two things to back up: the encryption key (which decrypts stored credentials) and the Postgres database (which contains workflows, executions, credentials in encrypted form).

Encryption key first. It's already in ~/.n8n-secrets. Print it, save it to a password manager, mail it to yourself, write it on paper. Losing this key means losing every stored credential.

Postgres backups:

cat > /home/n8n/backup.sh <<'EOF'
#!/bin/bash
set -euo pipefail

cd /home/n8n/n8n
BACKUP_DIR=/home/n8n/backups
TIMESTAMP=$(date +%Y%m%d-%H%M%S)
mkdir -p "$BACKUP_DIR"

# Database dump
docker compose exec -T postgres pg_dump -U n8n n8n | gzip > "$BACKUP_DIR/n8n-db-$TIMESTAMP.sql.gz"

# n8n config + binary data
tar -czf "$BACKUP_DIR/n8n-data-$TIMESTAMP.tar.gz" -C /home/n8n/n8n n8n-data

# Keep last 14 days
find "$BACKUP_DIR" -name '*.gz' -mtime +14 -delete

echo "Backup complete: $TIMESTAMP"
EOF

chmod +x /home/n8n/backup.sh

# Cron daily at 3 AM
crontab -e
# Add:
# 0 3 * * * /home/n8n/backup.sh >> /home/n8n/backup.log 2>&1

Push backups off the VPS — rclone to Backblaze B2 / Wasabi / S3. A backup that lives only on the VPS you're trying to protect against is not a backup.

9. Reference: scaling and licensing

Licensing — the fair-code question

n8n uses the Sustainable Use License — a "fair-code" license. Important constraints:

• ✅ Free for internal business use (run workflows for your company)
• ✅ Free for personal use
• ✅ Free for paying clients if the work is bespoke (an agency running client automations)
• ❌ Not free if you resell n8n as a managed SaaS to multiple customers

Most self-hosters are covered. The restriction targets companies that would white-label n8n and sell it as their own product.

Per-plan capacity

Plan	Workflows	Daily executions	Notes
Starter ($7.99, 2 GB)	10–20	~5,000	Light workflows only — no AI nodes
Pro ($15.99, 4 GB)	50–100	~50,000	Production setups with AI integration
Premium ($35.99, 8 GB)	200+	500,000+	High-throughput, multi-user teams

AI workflows are RAM-heavy

OpenAI, Anthropic, and HuggingFace nodes load large payloads in memory. A single GPT-4-class workflow can consume 200–500 MB transiently. Plan for Pro or Premium if your automations are AI-heavy.

Queue mode for high throughput

Default n8n runs all workflows in the main process. For high-volume use (10,000+ daily executions), enable queue mode: add a Redis container and set EXECUTIONS_MODE=queue. Workers process the queue in parallel. Documented in detail in the n8n docs — covered briefly here because it's only worth it at real scale.

External Postgres for production

The compose file above runs Postgres alongside n8n. Fine for small setups. For real production, run Postgres on a separate VPS — survives Docker restarts independently, can be scaled separately. See our PostgreSQL setup guide for the standalone version.

FAQ

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