Usage-based pricing
A pricing model where the customer's bill scales with their usage of the product, instead of a flat subscription. Sometimes called "consumption pricing" or "pay-as-you-go".
Last updated: 2026-05-10
Definition
Usage-based pricing maps a measurable unit of consumption (tokens, requests, GB, seconds) to a price. Variants: pure usage (every action billed), tiered (price changes at volume breakpoints), volume (whole bill priced at the highest tier reached), package (sold in bundles), and graduated (each tier priced separately). For AI products, hybrid plans - a fixed monthly fee that includes a quota, plus overage pricing - are most common because they keep bills predictable.
Example
OpenAI's API is pure usage-based: $5 per 1M input tokens for GPT-4o. AIPricingLab lets you wrap any provider in a usage-based plan for your end-users.
Related terms
Metered billing
Charging customers based on what they actually consumed in a billing period - tokens, image renders, agent runs - instead of a flat subscription fee.
GlossaryTokens
The unit of input and output for large language models - roughly 0.75 of a word in English. LLM providers price by tokens; metering AI apps usually does too.
GlossaryLimit group
The basic unit of quota in AIPricingLab: a label, a unit, a quota, a period, and a list of match rules that decide which events count toward it.