Fundamentals
Metered Billing Explained: How It Works, Examples and Best Practices
By the Orvlin team · · 7 min read
What is metered billing?
Metered billing is a pricing model where a meter records how much of a product each customer uses, and the invoice is calculated from that reading — the same way utilities bill for electricity or water.
Examples of metered billing
Common meters in software:
- API platforms: per request or per 1,000 calls.
- AI products: per input and output token.
- Cloud infrastructure: per compute hour or GB stored.
- Communications: per message sent or minute of call time.
Aggregation methods
Every meter needs a rule that turns events into a billable quantity:
- Sum: add a numeric property (tokens, bytes).
- Count: number of events (requests).
- Unique count: distinct values (active users, seats).
- Max: peak value in the period (concurrent jobs).
Best practices
Keep metered billing trustworthy:
- Give every event a unique ID so retries are never double-billed.
- Show customers live usage so invoices are never a surprise.
- Offer spend alerts and caps.
- Keep raw events so any invoice line can be audited.
Frequently asked questions
- Is metered billing good for SaaS?
- Yes, when usage correlates with value. Many SaaS companies pair a base fee with metered charges.
- What is the difference between metered billing and pay-as-you-go?
- Pay-as-you-go is one metered pricing model: a flat rate per unit with no commitment.