How to use the flat price vs pay as you go crossover calculator
- Enter your usage in units per month. Units can be messages, gigabytes, hours, rides or anything the plan prices by the unit.
- Name the first plan, enter its monthly fee and list its price tiers. Each tier says the price per unit that applies after a number of units.
- Do the same for the second plan. A flat plan has a monthly fee and a price of 0, or a price that starts after its included units.
- Read which plan is cheaper at your usage, how much you save, and the usage levels where the plans cost the same.
Formula
cost(u) = monthly fee + sum over tiers of price x max(0, min(u, next tier start) - tier start)
difference(u) = cost of the first plan - cost of the second plan
crossover: any usage where difference(u) = 0
Each plan's cost is a straight line between tier starts, with a new slope at each start. The page compares the plans one stretch at a time, so it finds every crossing, including one that lies beyond the last tier start.
A $99 flat plan against pay as you go
The flat plan costs $99 a month and charges $0.01 a unit above 20,000 units. The pay-as-you-go plan has no fee and charges $0.012 a unit above 1,000 units and $0.008 a unit above 10,000. At 12,000 units a month, the flat plan costs $99.00 and the pay-as-you-go plan costs $0.012 x 9,000 + $0.008 x 2,000 = $124.00, so the flat plan is cheaper by $25.00.
The plans cross twice. At 9,250 units the pay-as-you-go cost, 0.012 x 8,250, equals $99. Beyond 20,000 units the flat plan's cost rises by a cent a unit while the other rises by 0.8 cents, and the two meet again at 64,500 units at $544. Below 9,250 and above 64,500 units the pay-as-you-go plan is cheaper, and in between the flat plan is.
Why plans can cross more than once
A flat plan is cheap for heavy use, and a pay-as-you-go plan is cheap for light use, which suggests one crossing. But when each plan has tiers or overages, the slopes change, and the cheaper plan can change back. Looking only at your current usage can hide that. The table shows several usage levels around your own, and the crossing list shows every exact point.
If your usage is close to a crossing, small changes in how much you use will flip the best plan, so the risk matters more than the savings.
Related comparisons
To price a single quantity under graduated or volume tiers in more detail, use the Tiered Pricing Calculator. To choose between paying monthly and paying yearly for one plan, use the Annual vs Monthly Plan Calculator. For where a fixed cost and a variable cost meet, there is the Break-Even Calculator.
Assumptions and limits
- Prices are examples you can change. Real plans can round usage up, bill whole blocks, set minimum charges or add taxes and fees.
- A tier's price applies only to the units above its starting point and below the next tier's start (graduated pricing).
- Usage is the same every month. If yours varies, check the plans at your lowest and highest usage.
- Each plan can have up to five tiers, and two tiers cannot start at the same number of units.
- Nothing typed here leaves your browser.
Frequently asked questions
How do I describe a plan with included units?
Enter a tier that starts after the included units with the overage price, and nothing for the units below it. For example, 1,000 included units and $0.02 after that is one tier starting at 1,000 with a price of 0.02.
What does a price of zero mean?
It means units above the start of that tier add nothing. Use it for an unlimited plan, or to turn off overage charges above a certain usage.
Why does the page list two crossing points?
When the plans have tiers, the cheaper plan can change more than once as usage grows. The page checks every stretch between tier starts and the stretch past the last one.
What if the plans never cross?
Then one plan is cheaper at every usage level. The page says that the plans never cost the same, and the table shows how the gap changes.