Usage-Based Billing
Subscriptions
Add-ons
Seat-Based Billing
What is Hybrid Billing?
Hybrid billing combines multiple pricing dimensions into a single product offering. Instead of choosing between flat-rate subscriptions OR usage-based pricing, you use both together.Why Use Hybrid Billing?
Common Hybrid Patterns
Hybrid Model 1: Subscription + Usage
The most common hybrid model. Customers pay a base subscription fee plus charges for consumption that exceeds included allowances.How It Works
Pro Plan: $49/month- Included: 10,000 API calls/month
- Overage: $0.005 per call after 10,000
- Base subscription: $49.00
- Overage: (25,000 - 10,000) × 75.00
- Total: $124.00
Use Cases
- API platforms: Base access + per-request charges
- AI/ML services: Subscription + token/generation usage
- Storage services: Base plan + per-GB overage
- Communication platforms: Base + per-message/minute charges
Implementation
Create Usage Meter
Create Subscription Product with Usage Pricing
Create Checkout Session
Send Usage Events
Pricing Variations
- Included Allowance
- Zero Base + Pure Usage
- Tiered Allowances
- Includes: 10,000 API calls
- Overage: $0.005/call after 10,000
- Customer uses 8,000 → Pays $49 (no overage)
Hybrid Model 2: Subscription + Seats
Platform fee plus per-user charges. Ideal for team collaboration tools and B2B SaaS.How It Works
Team Plan: 15/seat- Base platform fee: $99/month (includes 3 seats)
- Additional seats: $15/seat/month
- Platform fee: $99.00
- Extra seats: (12 - 3) × 135.00
- Total: $234.00/month
Use Cases
- Collaboration tools: Workspace fee + per-member
- CRM systems: Platform license + per-sales-rep
- Project management: Team plan + per-contributor
- Developer tools: Organization fee + per-developer
Implementation
Create Seat Add-on
Create Base Subscription
Create Checkout with Seats
Adjust Seats as Needed
Pricing Variations
- Included Seats
- Pure Per-Seat
- Tiered Per-Seat
- Includes: 5 seats
- Extra seats: $15/seat/month
- 20 users = $99 + (15 × $15) = $324/month
Hybrid Model 3: Subscription + Feature Add-ons
Core subscription with optional feature upgrades customers can add.How It Works
Core Plan: $29/month Optional Add-ons:- Advanced Analytics: +$19/month
- API Access: +$9/month
- Priority Support: +$29/month
- White-label: +$49/month
- Core plan: $29.00
- Analytics: $19.00
- API Access: $9.00
- Total: $57.00/month
Use Cases
- SaaS platforms: Core features + premium modules
- Marketing tools: Base tool + integrations
- Analytics products: Dashboard + advanced reports
- Security software: Basic protection + advanced features
Implementation
Create Feature Add-ons
Create Core Subscription
Let Customers Choose
Add Features Later
Hybrid Model 4: Seats + Usage
Per-user fee combined with consumption-based charges. Each user gets an allowance.How It Works
Team Analytics: $20/user/month Each user includes:- 5 GB data processing/month
- Overage: $2/GB after allowance
- Seat fees: 10 × 200.00
- Included data: 10 × 5 GB = 50 GB
- Overage: (80 - 50) × 60.00
- Total: $260.00/month
Use Cases
- Analytics platforms: Per-analyst + data processing
- Design tools: Per-designer + storage/exports
- Development environments: Per-developer + compute hours
- Communication tools: Per-user + message/call volume
Implementation Options
Since you cannot attach both usage meters and add-ons to the same subscription, choose one of these approaches:- Option A: Usage Product + App-Managed Seats
- Option B: Seat Add-on + On-Demand Usage Charges
Create Usage Meter
Create Usage-Based Subscription
Manage Seats in Your Application
Calculate Dynamic Free Threshold
Hybrid Model 5: Subscription + Seats + Usage (Triple Hybrid)
The most comprehensive model: platform fee + per-user + consumption.How It Works
Enterprise Platform- Platform Fee: $199/month
- Per Seat: $25/user/month
- Usage: $0.10/1000 API calls (50K included)
- Platform: $199.00
- Seats: 20 × 500.00
- Usage: (150K - 50K) × $0.10/1K = $10.00
- Total: $709.00/month
Use Cases
- Enterprise SaaS: Platform + team + consumption
- Data platforms: Workspace + analysts + queries
- Integration platforms: Hub + connectors + transactions
- AI platforms: Workspace + developers + inference
Implementation Options
Choose one of these approaches to implement triple hybrid billing:- Option A: Base + Seats (Add-on) + On-Demand Usage
- Option B: Base + Usage (Meter) + App-Managed Seats
Create Seat Add-on
Create Subscription Product
Create Checkout with Seats
Track Usage in Your Application
Charge Usage at End of Cycle
Hybrid Model 6: Tiered Base + Usage Overage
Different subscription tiers with different included allowances and overage rates.How It Works
Implementation
Create separate subscription products for each tier, each with its own usage configuration:Upgrade Path
When customers upgrade tiers, they get:- Higher included allowance
- Lower overage rates
- More value per dollar
Hybrid Model 7: Subscription + On-Demand Charges
Recurring subscription plus variable manual charges for services or overages.How It Works
Retainer Plan: $199/month Includes:- Platform access
- 5 hours consulting/month
- Email support
- Extra consulting: $150/hour
- Custom development: $200/hour
- Emergency support: $100/incident
- Retainer: $199.00
- 3 extra consulting hours: $450.00
- 1 emergency support: $100.00
- Total: $749.00
Use Cases
- Consulting services: Retainer + hourly billing
- Managed services: Base fee + incident charges
- Agency services: Monthly fee + project charges
- Support plans: SLA fee + per-ticket or per-hour
Implementation
Create On-Demand Subscription
Charge for Services
Track and Invoice
Real-World Examples
Example 1: AI SaaS Platform
Pricing Structure:- Base Subscription: $99/month (platform access, 5 seats included)
- Seat Add-on: $20/seat/month
- Feature Add-ons: Custom Models ($49/mo), API Access ($29/mo), Priority Queue ($19/mo)
- Usage Overage: $0.02 per 1,000 tokens after 100K (charged via on-demand)
Example 2: Developer Tools Platform
Tier Options:- Extra users: $10/user/month
- Priority builds: $19/month
- Custom domains: $9/domain/month
Example 3: Marketing Automation
Pricing Structure:- Base: $79/month (core automation features, 3 seats included)
- Contact Tiers (add-ons): 1K included, 5K (+$30), 25K (+$80), 100K (+$200)
- Feature Add-ons: SMS Marketing ($29/mo), Landing Pages ($19/mo), A/B Testing ($29/mo)
- Team Seats: $15/user/month add-on
- Email Volume: Track in application, charge overage via on-demand ($1/1,000 emails over limit)
Implementation Best Practices
Pricing Page Clarity
Good: “$49/month includes 10,000 API calls. Additional calls: $0.005 each” Bad: “$49/month + usage fees”Cost Predictability
Help customers estimate their costs:Usage Visibility
Show customers their usage in real-time:Billing Transparency
Provide detailed invoices showing all components:Troubleshooting Hybrid Billing
Usage not being tracked correctly
Usage not being tracked correctly
- Verify event ingestion is working (check API responses)
- Confirm
customer_idmatches the subscription customer - Check
event_namematches the meter configuration - Verify events have correct timestamps (not future-dated)
Proration confusion with multiple components
Proration confusion with multiple components
- Use
previewChangePlanAPI to show exact charges before confirming - Communicate that proration applies to subscription AND add-ons
- Consider using
difference_immediatelyfor simpler upgrade billing
Free threshold not applying correctly
Free threshold not applying correctly
- Verify free threshold is configured on the usage-based product
- Check threshold unit matches event aggregation (calls vs. requests)
- Confirm usage meter is correctly attached to the subscription product
Add-ons not appearing in checkout
Add-ons not appearing in checkout
- Verify add-ons are attached to the subscription product in dashboard
- Check add-on IDs are correct in API calls
- Ensure add-on currency matches subscription product currency