What is Overage Charge?
Definition
An additional fee charged when a subscriber exceeds the usage limits included in their subscription plan.
Understanding Overage Charge
Overage charges apply when you go beyond your plan's limits — exceeding data caps, storage quotas, API call limits, or user seats. They are common in cloud services, mobile plans, and usage-based SaaS. Overage rates are typically higher than in-plan rates to incentivize upgrading.
For example, a cloud storage plan might include 100GB for $10/month but charge $0.25/GB for overage, making 120GB cost $15 instead of upgrading to a 200GB plan at $15. Monitor usage to avoid surprise overages and evaluate whether upgrading your plan would be more cost-effective.
Related Terms
Usage-Based Pricing
A pricing model where customers pay based on how much they use a service rather than a fixed subscription fee.
Tiered Pricing
A pricing strategy where a service offers multiple plan levels with different feature sets and price points to serve different customer segments.
Billing Cycle
The recurring time period between billing dates for a subscription service, such as monthly, quarterly, or yearly.
Subscription
A recurring payment arrangement where a customer pays at regular intervals to access a product or service.