# Billing & Usage Overview

The WatchDog Security Platform supports both **Pay-As-You-Go** and **Annual Commitment** billing models for direct customer tenant. Billing is based on the number of users assigned to billable packages such as **Core**, **Business**.

This article explains how usage tracking works, how annual seat commitments behave, and how billing is calculated across both billing models.

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  <div style="font-weight:700; margin-bottom:20px;">Who can use this feature?</div>

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        All <span style="color:#d760f9; font-weight:600;">Account Owners</span> and <span style="color:#d760f9; font-weight:600;">Security Admins</span>
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        Available on the <span style="color:#d760f9; font-weight:600;">Free</span>, <span style="color:#d760f9; font-weight:600;">Core</span> and <span style="color:#d760f9; font-weight:600;">Business</span> plans
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# Billing Models
WatchDog currently supports two billing structures for direct customer tenants:

| Billing Model | Description |
| --- | --- |
| Pay-As-You-Go | Usage-based billing calculated daily from assigned users |
| Annual Commitment | Customers commit to a fixed number of seats for a 12-month term |

# How Pay-As-You-Go Billing Works
The Pay-As-You-Go model is designed for organizations that want flexible scaling without committing to a fixed seat quantity upfront.

Unlike traditional licensing models:

- Usage is tracked daily
- Billing is based on assigned users per package
- Charges are calculated from real usage
- Billing occurs at the end of the billing period
- Users can freely be added or removed throughout the month

Each package is tracked independently. For example, a user assigned to the **Business** package contributes toward Business package usage only.

# How We Calculate Charges
WatchDog calculates charges using daily active user counts for each package.

<Steps>
  <Step title="Track Daily Assigned Users">
    Every day the platform records how many users are actively assigned to each package.
  </Step>

  <Step title="Aggregate Monthly Usage">
    At the end of the billing period, all daily usage records are added together to calculate total monthly usage.

$Total Usage = Σ(Daily Assigned Users)$
  </Step>

  <Step title="Calculate Average Monthly Quantity">
    The platform calculates the average assigned user count across the billing period using a normalized 30-day billing cycle.

$Average Quantity = Total Usage ÷ 30$
  </Step>

  <Step title="Round to Final Billable Quantity">
    Once the average quantity is calculated, the result is rounded to the nearest whole number. This becomes the final quantity billed for the month.
  </Step>

  <Step title="Generate Invoice">
    The final rounded quantity is multiplied by the package monthly price to generate the invoice total.

$Monthly Charge = Rounded Quantity × Monthly Package Price$
  </Step>
</Steps>

# Pay-As-You-Go Billing Scenarios
Below are common real-world examples showing how charges behave.

<AccordionGroup>

  <Accordion title="Scenario 1: Users Added Mid-Month" defaultOpen>

This scenario demonstrates how billing works when users are assigned licenses midway through a billing cycle.

| Days | Assigned Users |
| --- | --- |
| Day 1-15 | 0 |
| Day 16-30 | 30 |

$Total Usage = (15 × 0) + (15 × 30) = 450$

$Average Quantity = 450 ÷ 30 = 15$

**Final Billable Quantity:** 15 Users

**Result:** Although 30 users existed at the end of the month, billing is averaged across the full billing period.

  </Accordion>

  <Accordion title="Scenario 2: Usage Gradually Increases">

This scenario demonstrates how billing scales as additional users are onboarded throughout the month.

| Days | Assigned Users |
| --- | --- |
| Day 1-10 | 10 |
| Day 11-20 | 20 |
| Day 21-30 | 30 |

$Total Usage = (10 × 10) + (10 × 20) + (10 × 30) = 600$

$Average Quantity = 600 ÷ 30 = 20$

**Final Billable Quantity:** 20 Users

**Result:** Billing reflects the average usage throughout the month rather than the peak assigned quantity.

  </Accordion>

  <Accordion title="Scenario 3: Usage Decreases During the Billing Period">

This scenario shows how costs decrease automatically when users are removed during the billing cycle.

| Days | Assigned Users |
| --- | --- |
| Day 1-20 | 50 |
| Day 21-30 | 10 |

$Total Usage = (20 × 50) + (10 × 10) = 1100$

$Average Quantity = 1100 ÷ 30 = 36.67$

**Final Billable Quantity:** 37 Users

**Result:** Billing automatically adjusts downward based on average assigned usage across the month.

  </Accordion>

</AccordionGroup>

# When Usage Starts Counting
Usage tracking begins as soon as:

- Billing is configured
- A billable package is assigned to at least one user

Usage is evaluated daily and automatically reflected in billing calculations whenever users are added, removed, or reassigned between packages.

# How Annual Commitment Billing Works
The Annual Commitment model is designed for organizations that want predictable yearly billing with committed seat quantities.

Under this model:

- Customers commit to a fixed number of seats for a 12-month term
- Billing is charged upfront annually
- Seats can be reassigned freely between users
- Additional seats added during the term automatically increase the commitment
- Additional seats are prorated for the remainder of the annual term

# How Annual Seat Commitments Work

<Steps>
  <Step title="Purchase Initial Annual Commitment">
    During checkout, the customer selects the number of seats they want to commit to for the upcoming annual term.
  </Step>

  <Step title="Assign Users to Seats">
    Seats may be assigned, removed, or reassigned freely throughout the year without affecting billing, provided the total assigned users remain within the committed seat count.
  </Step>

  <Step title="Automatically Expand Commitment">
    If the number of assigned users exceeds the committed seat quantity, the platform automatically increases the annual commitment to match the new usage.
  </Step>

  <Step title="Prorated Annual Charges">
    Any newly committed seats added during the annual term are billed on a prorated basis for the remaining duration of the contract.
  </Step>

  <Step title="Annual Renewal Reset">
    At renewal time, the committed seat count resets to the number of assigned users immediately before the renewal occurs.
  </Step>
</Steps>

# Annual Billing Scenarios
Below are common real-world examples showing how annual commitments behave.

<AccordionGroup>

  <Accordion title="Scenario 1: Staying Within Annual Commitment" defaultOpen>

A customer purchases an annual commitment for **100 seats**.

Throughout the year, assigned usage fluctuates between 60–95 users.

**Result:** No additional charges occur because usage never exceeds the committed seat quantity.

  </Accordion>

  <Accordion title="Scenario 2: Commitment Expands Mid-Year">

A customer commits to **100 seats** annually.

Six months into the term, assigned usage increases to **120 users**.

| Period | Assigned Users | Billable Commitment |
| --- | --- | --- |
| Months 1-6 | 100 | 100 |
| Months 7-12 | 120 | 120 |

**Result:**  
The additional 20 seats are automatically added to the annual commitment and prorated for the remaining 6 months.

  </Accordion>

  <Accordion title="Scenario 3: Seat Usage Drops Before Renewal">

A customer expands from **100 seats** to **150 seats** during the annual term.

Before renewal, usage decreases to **90 assigned users**.

| Renewal State | Seat Count |
| --- | --- |
| Peak Annual Commitment | 150 |
| Assigned Users Before Renewal | 90 |
| New Renewal Commitment | 90 |

**Result:**  
At renewal, the committed seat quantity resets to the currently assigned user count rather than the historical peak usage.

  </Accordion>

</AccordionGroup>

# Configure Billing
This section is used to configure the billing profile and payment method required to activate billable services.

<Steps>
<Step title="Sign in to WatchDog Security">
  Sign in to the [**WatchDog Security Platform**](https://app.watchdogsecurity.io).
</Step>

<Step title="Open Settings">
  Click your **profile picture** in the top-right and select **Settings**.
</Step>

<Step title="Open the Billing Tab">
  Select the **Billing** tab to view available subscription plans and billing options.
</Step>

<Step title="Configure Billing">
  Select **Upgrade** to configure the **Billing Information** and **Payment Method** required to activate Monthly or Annual billing.
</Step>

<Step title="Activate Subscription">
  Once billing is configured, the subscription will begin immediately or automatically activate at the end of the active trial period.
</Step>
</Steps>