Metered billing in Singapore: A 2026 guide

Key takeaways:

• Metered billing tracks how much each customer uses, applies your rates and calculates what they owe. It’s what makes usage-based pricing possible.

• Accurate bills start with accurate usage data. You need to avoid double counting or missing usage, and have a way to correct errors before invoices go out.

• Airwallex Billing connects usage metering, flexible pricing, invoicing and payment collection, helping you turn customer usage into accurate bills without managing each step separately.

Metered billing in Singapore lets software and AI businesses charge customers based on how much they use, rather than a fixed monthly fee. You might bill for API calls, storage, or AI tokens, depending on how customers use your product.

But charging by usage comes with its own challenges.

How do you track every billable action accurately? And what do you need to consider when GST and InvoiceNow requirements apply to invoices that change from month to month?

This guide explains how metered billing works for software and service businesses, and how it differs from usage-based pricing and subscription billing.

What is metered billing?

Metered billing is a pricing method where customers pay for the amount of a product or service they use, at a set rate per unit. Each bill reflects the customer’s actual usage, rather than a fixed monthly fee.

Utility bills in Singapore work on the same principle: your electricity bill from SP Group is based on the kilowatt-hours (kWh) you consume, while your water bill from PUB is based on the cubic metres you use.

A meter records consumption, the provider applies the relevant rate, and you receive a bill for the total.

Metered billing applies this model to software and services. Instead of kWh or cubic metres, you track units such as API calls, gigabytes of storage, processing minutes or AI tokens. Each is a billable unit with a price attached to it.

Every metered bill follows five basic steps:

• Your customer uses your product.

• Your system records the activity.

• A meter totals the billable usage over the billing period.

• Your rates are applied to that total.

• An invoice is issued for the customer to pay.

Metered billing is also sometimes called pay-as-you-go billing. It is closely related to usage-based billing, but the terms are not always interchangeable. The next section explains the difference.

Metered billing vs usage-based billing vs subscription billing

These terms describe different parts of how customers are charged. Here’s a quick overview:

Usage-based billing is a pricing approach where customers pay according to how much they use. Metered billing is the process of recording that usage and calculating the amount owed, so the two terms are often used interchangeably. For more details, read our guide to usage-based billing.

Want to support different pricing models as your business grows? Airwallex supports per-unit, tiered, volume-based, and hybrid pricing, so you can bill for usage alongside a recurring base fee.

How metered billing works

Metered billing has four main steps: defining what to count, recording usage, calculating the charges, and invoicing the customer. If any step is inaccurate, the final bill can be wrong.

Usage metric

The usage metric is what you charge for, such as API calls, active users, or gigabytes stored. Choose a unit customers can understand and that reflects how they use your product.

Metering

Metering records each billable action. When a customer uses your product, your system sends a usage event to your billing platform through an API, a way for software systems to exchange data. Each event records details such as the customer, the type of activity, when it happened, and the amount used.

Your engineering team sets up the connection, after which usage events can be recorded automatically. The billing platform then totals each customer’s usage over the billing period.

Rating

Rating calculates the charge by applying your pricing rules to the recorded usage. You might charge the same rate for every unit, or use tiered or volume pricing where the rate depends on how much the customer uses.

Invoicing

The billing platform uses the calculated charges to generate an invoice, which is sent to the customer for payment. If your plan includes a recurring base fee, that is added to the usage charges.

Here’s a simple example using illustrative figures:

Before choosing a billing setup, ask your engineering team or billing provider:

• Can usage be counted twice? Duplicate events could lead to overcharging.

• What happens when usage data arrives late? Events received after a billing period closes could be missed or charged in the wrong period.

• Can errors be corrected before invoicing? You need a way to fix inaccurate usage records or charges before the invoice is sent.

Metering for SaaS: what should you charge for?

For SaaS businesses, metered billing starts with choosing what to count.

Your usage metric affects both what customers pay for and how your revenue grows as they use your product. The right metric depends on how customers get value from your software and what drives your costs.

Here are a few examples:

Before settling on a metric, ask three questions:

• Is it easy to understand? Customers should know what counts as a billable unit without needing a manual to explain it.

• Does it reflect value? As customers get more from your product, their usage should ideally grow in a way that makes the pricing feel fair.

• Can you measure it reliably? Your system should record billable usage accurately and consistently.

Be careful with metrics customers have little control over or cannot easily predict. Unexpected charges can make customers hesitant to use your product.

Once you’ve chosen your usage metric, you need a way to track it and turn it into accurate bills. Airwallex lets you set up meters and pricing rules, then automate usage calculations and invoicing as customers use your product.

Billing for AI tokens in Singapore

For AI businesses, metered billing often means charging customers based on how much they use an AI model. If you build on a large language model (LLM), your costs generally increase with token usage, so you need a way to track that usage and turn it into accurate customer bills.

How token billing works

A token is a small piece of text that an AI model processes or generates. It can be a whole word, part of a word, or punctuation.

Anthropic, for example, charges different rates for input tokens (the text sent to the model) and output tokens (the text it generates), with prices listed in USD.¹

You can track both token types for each customer, apply your own rates, and include the charges in their invoice. The difference between what you collect and what you pay your model provider contributes to your margin, alongside other costs such as hosting and product development.

AI businesses can charge per token or request, sell prepaid credits, or combine a monthly fee with usage charges. The right structure depends on how predictable customers need their bills to be and how easily they can estimate their usage.

For examples and a comparison of these approaches, see our guide to usage-based pricing models in Singapore.

How exchange rates affect your margins

If you charge customers in SGD but pay your model provider in USD, exchange rate movements can affect your margins.

For example, if you pay US$10,000 a month for AI model usage, a 3% increase in the cost of converting SGD to USD would add S$300 to your monthly bill, even if your token usage stays the same.

Where possible, consider billing in the currency you pay your provider in, or offering rate cards in multiple currencies. This can reduce your exposure to exchange rate changes, although it won't remove the risk entirely.

Metered billing pitfalls and how to avoid them

Metered billing depends on accurate usage records, clear billing rules, and timely communication with customers. Here are the main issues to plan for:

Before automating billing at scale, manually check your first few invoices against the underlying usage records. This helps catch errors before they affect more customers.

Metered billing in Singapore: GST, InvoiceNow and getting paid

If you charge customers based on usage, your billing setup needs to account for Singapore’s GST rules, e-invoicing requirements, and payments that vary from one billing cycle to the next.

GST and invoice timing

Under IRAS rules, the time of supply is generally the earlier of the date you issue an invoice or receive payment. This determines which GST accounting period the sale falls into.

With metered billing, make sure your usage calculations and invoice schedule align with your GST reporting.

Services supplied to overseas customers may qualify for zero-rating if the relevant conditions are met. For invoice fields and format requirements, see our guide to GST invoice requirements in Singapore.

InvoiceNow

InvoiceNow is Singapore’s national e-invoicing network. IRAS is phasing in the GST InvoiceNow Requirement for GST-registered businesses from 1 November 2025 to 1 April 2031, depending on factors such as registration type and annual supplies.²

Under the requirement, affected businesses must use InvoiceNow-ready software to transmit invoice data to IRAS. Check whether your billing platform supports this requirement, and read our InvoiceNow guide for more details.

Currency and getting paid

If you issue invoices in a foreign currency, you must convert the relevant amounts into SGD for GST reporting using exchange rates that meet IRAS requirements.²

Because usage-based invoices can vary each cycle, check that your payment methods can collect changing amounts.

Before you launch, check that:

• Your invoice schedule aligns with your GST reporting requirements.

• Your billing software supports InvoiceNow if your business is required to use it.

• Foreign-currency invoices are converted correctly for GST reporting.

• Your payment methods can collect variable invoice amounts.

Is metered billing right for your business?

Metered billing works best when your costs rise with customer usage and you can measure that usage accurately. Ask yourself three questions:

• Do your costs rise with usage? If heavy users cost significantly more to serve than light users, a flat fee may leave you covering the difference.

• Can you measure usage accurately? You need a clear unit to bill against, such as API calls, gigabytes, or tokens.

• Are customers comfortable with variable bills? Some customers need predictable monthly costs and may prefer a fixed fee.

If your costs scale with usage, you can measure it reliably, and customers accept variable bills, metered billing may be a good fit. If customers want more predictable costs, consider a hybrid model that combines a base fee with usage charges.

Finally, if your costs stay relatively stable regardless of usage, subscription billing may be simpler.

What to look for in a metered billing platform

A metered billing platform should track usage accurately, calculate charges correctly, and make it easy to manage pricing as your business grows. When comparing options, look for:

• Accurate usage tracking: Records usage without double counting and accounts for late-arriving data.

• Usage corrections: Lets you correct errors before invoices are issued.

• Flexible pricing: Supports per-unit, volume, tiered, and hybrid pricing, with room to change rates without rebuilding your billing setup.

• Multi-currency billing: Supports billing and collecting payments in the currencies your customers use.

• Singapore requirements: Supports GST-compliant invoicing and InvoiceNow where required.

• Easy day-to-day management: Lets engineering maintain the usage data integration while finance manages rates and pricing rules.

For a broader comparison of billing tools, see our guide to subscription billing software in Singapore.

Why Singapore businesses choose Airwallex for metered billing

Airwallex Billing turns product usage into invoices without manual work.

Your system sends usage events through an API, and no-code meters count or total them for each billing period. One event can feed several meters, such as a request count and a token total. Key features include:

• Flexible pricing: Set per-unit, tiered, volume-based, or flat rates, or combine usage charges with a base fee.

• Usage accuracy: Void usage events sent in error, with a one-hour grace period to capture late-arriving events.

• Invoice corrections: Issue credit notes for invoices that have already been finalised.

• Payment collection: Send invoices automatically, with retries and reminders for failed payments.

You can sign up for an Airwallex account online; there are no setup fees or monthly fees on the free Explore plan.

Frequently asked questions

What is an example of metered billing?

Electricity and water bills are the everyday example. SP Group and PUB charge you for what you use. In software, a company that charges per API call, per gigabyte stored, or per AI token processed uses metered billing, and each customer’s invoice changes with their own usage.

Is metered billing the same as usage-based billing?

Not exactly, though many providers use the terms interchangeably. Usage-based billing is the pricing model, where customers pay for what they use. Metered billing is how you measure that usage and turn it into an invoice.

How does metered billing work for SaaS?

Your product records each customer’s usage, a meter adds it up over the billing period, and your pricing rules turn the total into an invoice. Common SaaS units include API calls, active users, storage, and processing time. Your engineering team connects usage tracking once, and the billing platform handles the rest. Airwallex Usage-Based Billing handles metering and invoicing in one place.

How do you bill customers for AI tokens in Singapore?

Meter the tokens each customer uses, apply your own rate per unit, and invoice at the end of the billing period. Many AI companies add prepaid credits or a base fee to keep bills predictable. If you pay model providers in USD but bill customers in SGD, build exchange rate movements into your pricing.

Do you charge GST on metered billing invoices in Singapore?

Yes, if you’re GST-registered and the supply is standard-rated, you charge GST on a usage invoice as you would on any other sale. Some services billed to overseas customers can be zero-rated, but not all of them qualify. Check your specific service against IRAS rules before you choose a rate.

Can you combine a subscription with metered billing?

Yes, and many businesses do. A base fee covers fixed costs or a set allowance, and you charge for usage on top of it or only above the allowance. This hybrid model gives customers a predictable minimum. Airwallex Billing supports hybrid plans that combine subscriptions with usage-based pricing.

Sources:

1. https://platform.claude.com/docs/en/about-claude/pricing

2. https://www.iras.gov.sg/docs/default-source/default-document-library/frequently-asked-questions-for-gst-invoicenow-requirement.pdf