HesapHanem

Tiered Pricing Calculator

Work out a bill across tiered unit prices.

How it is calculated

The tool prices usage in two bands, and each unit is charged only at the rate of the band it falls in. tier 1 cost = min(units, tier 1 limit) × tier 1 price and tier 2 cost = max(0, units − tier 1 limit) × tier 2 price. The total is the two added together. Units is the total quantity used, the tier 1 limit is how many units the first band holds, and the prices are the cost per single unit in dollars. If usage stays within the first band, tier 2 costs nothing. Units, the tier 1 limit and both prices cannot be negative; a negative entry gives no result. Only two tiers are supported, so a plan with three or more bands needs to be split into separate calculations. Whether the second price is higher or lower than the first makes no difference to the method.

Worked example

A plan charges 0.10 per unit for the first 1000 units and 0.07 per unit after that. Usage is 1500 units. Step 1: tier 1 holds 1000 units, so 1000 × 0.10 = $100.00. Step 2: the remaining 1500 − 1000 = 500 units fall in tier 2, so 500 × 0.07 = $35.00. Step 3: total = 100 + 35 = $135.00. Charging all 1500 units at the tier 2 price would give $105.00 and at the tier 1 price $150.00, so the split matters.

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Common mistakes

  • Multiplying all units by the new rate once the threshold is crossed. That is a different (all-units) scheme; here only the units above the limit get the second price.
  • Entering the tier 2 limit or a cumulative threshold in the tier 1 limit field. The field is the size of the first band, for example 1000, not where the second band ends.
  • Mixing units, such as a limit in thousands and usage in single units.
  • Entering prices in cents when the tool treats them as dollars. A price of 7 means 7 per unit, not 0.07.
  • Typing a negative price to model a discount or credit. Negative prices are rejected and show no result; lower the price instead.

About this calculator

Tiered pricing charges a different unit rate depending on how much is used, most commonly with a lower rate for the first block of usage and a higher (or lower) rate once usage crosses a threshold into the next tier. The total bill is the sum of each tier's usage multiplied by that tier's rate — not the full quantity multiplied by a single rate.

This structure is common in software subscriptions, utility billing, and wholesale pricing, where providers want to reward (or price for) different levels of consumption rather than charging everyone the same flat rate regardless of volume.

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