Usage-Based Billing for SaaS: How It Works and How to Set It Up
Usage-based billing charges a SaaS customer for what they use, such as API calls, exports, credits or seats, instead of one flat price for everyone. On Pocketsflow you add meters and seats to a subscription, your app reports usage through the API, and at the end of each billing period Pocketsflow charges the usage above the included amount in one payment to the card the subscription already uses.
How usage-based billing works
A usage-based plan has three parts: a meter that counts something your customer does, an allowance included in the price, and a rate for each unit above it. Your app counts and reports; the billing system totals the period and charges. Pocketsflow calls the counted thing a meter, gives it a name and a unit, such as "API calls" and "call", and lets one subscription carry up to five meters.
Per unit, graduated and volume pricing on Pocketsflow
Pocketsflow prices each meter in one of three ways. Tiers count billable units, the units left after the included amount.
- Per unit: one price for every billable unit, such as $1 per 1,000 calls. Pocketsflow sets prices per package of units, so prices under a cent stay exact.
- Graduated: each tier prices only the units that fall inside it, like tax brackets. The first 100,000 calls cost one rate, the next ones a lower rate.
- Volume: every billable unit is priced at the rate of the tier the total reaches, so a customer who crosses into a cheaper tier gets that rate on all units.
The chart prices the example meter from Pocketsflow's usage billing docs: 10,000 calls included, $1 per 1,000 for the first 100,000 billable calls, then $0.50 per 1,000.
| Point | Graduated | Volume |
|---|---|---|
| 50k | $40 | $40 |
| 110k | $100 | $100 |
| 250k | $170 | $120 |
| 500k | $295 | $245 |
| 1M | $545 | $495 |
Source: Pocketsflow usage billing docs (docs.pocketsflow.com), example meter, November 2026. Charge for usage only, before the subscription price.
At 110,000 calls both models charge $100.00. At 250,000 calls graduated pricing charges $170.00 and volume pricing $120.00, because volume moves every billable call to the $0.50 rate. Graduated pricing protects your margin; volume pricing rewards your biggest customers.
Per-seat pricing for team plans
Pocketsflow also prices a subscription per seat. Buyers pick their seats at checkout, from 1 up to a maximum you set, and pay the price times the seats every period. Seats added later are billed at the end of the period, prorated by the days they were held. Pocketsflow can also issue each subscriber a license key whose activation limit follows their seat count, which suits desktop apps and plugins.
How to set up usage-based billing on Pocketsflow
- Create a subscription in Pocketsflow with the base price and billing period.
- Open Usage & seats in the subscription editor. Turn on Charge for usage, add a meter such as
api_calls, set the included units and pick per unit, graduated or volume pricing. - From your app, call
POST /subscriptions/{id}/usagewith the meter and the quantity whenever a subscriber uses something billable. Send an idempotency key so a retry never counts twice. - Add a webhook for
usage.period_closed. Pocketsflow sends it when a period ends, with the totals and the charge status. - Test in test mode with a test API key, then switch to live.
Usage-based pricing is part of the Pocketsflow Pro plan. Each payment carries the standard Pocketsflow fee, 4.7% + $0.30 as of November 2026, with tax handled as the merchant of record.
Report usage without hurting your API
Pocketsflow accepts up to 300 usage reports a minute per subscriber. Count usage in your app and report it in batches: one report with a quantity of 500 costs the same as 500 reports of 1. Reports must fall inside a billing period that is still open, so send them before the period closes.
When usage-based billing fits a SaaS
Usage-based billing fits a SaaS whose costs grow with use, such as AI features, API access, email sending or file processing. A flat plan fits a SaaS whose value is the same for every user. Many SaaS teams use both: a base plan with an allowance and usage above it, which is what a Pocketsflow subscription with a meter does. An AI app can manage it too: Pocketsflow's update_usage_pricing, report_usage and get_subscription_usage tools are on the Pocketsflow MCP server. For more, read how to price a SaaS product or start at Pocketsflow for SaaS.