Method and assumptions
Usage billing should state the included allowance and overage rule clearly. Check whether customers can predict bills at their expected peak usage.
Total charge = base fee + max(usage - included units, 0) × overage price.
Common questions
Should overage price be lower than the base unit price?
It depends on value, marginal cost and the predictability you want to provide.
What if usage is below the allowance?
The customer still pays the base fee and has no overage charge.
Independent planning calculator. Not financial, tax, legal or investment advice.