Fair billing
Fair billing means a per-seat subscription charges only for the people actually using it, crediting or not billing seats that stay inactive during the period.
Also known as: Fair billing policy
Fair billing is a per-seat pricing promise that you pay for the licences people actually use rather than every licence you once bought. Slack's Fair Billing Policy is the best-known example: it automatically credits your account for members who are deactivated, and only charges for active members, so a seat nobody uses does not quietly keep billing.
Most vendors are not this generous. On a typical per-seat plan an empty or deactivated seat keeps costing money until you remove it at the next renewal, which is why seat waste is worth tracking. When you compare tools, check whether billing is genuinely usage-based, pro-rated on deactivation, or simply fixed for the term - the wording decides whether an unused seat is free or just forgotten.
Related terms
- Cooling-off periodA cooling-off period is a short window just after signing when you can cancel a new contract for a refund - common for consumers, rare and narrow for business software.
- Software renewalThe point at which a software subscription or licence reaches the end of its term and either continues, is renegotiated, or ends.
- Renewal dateThe date a contract term ends and renews for another period. It is the anchor from which the cancellation deadline is calculated.