Seat-based pricing charges for a defined number of user, agent, workstation or delivery seats over a stated period. It is used in software, facilities and outsourced service arrangements.
What counts as a seat?
A seat can mean a named user, concurrent user, staffed role, workstation or capacity unit. The contract must define whether vacant, training, shared and part-time positions are billable.
How is the charge calculated?
Assume 30 billable seats at $800 per month, with five additional seats active for half the month at a prorated $400 each. The illustrative monthly charge is 30 × $800 + 5 × $400 = $26,000 before other fees.
Illustrative seat-based charge
| Charge component | Amount | Method |
|---|---|---|
| Thirty full-month seats | $24,000 | 30 × $800 |
| Five half-month seats | $2,000 | 5 × $400 |
| Illustrative total | $26,000 | $24,000 + $2,000 |
The example excludes setup, overtime, equipment, taxes and minimum commitments.
Seat-based vs. outcome-based pricing
Seat-based pricing charges for capacity. Outcome-based pricing ties payment to defined results. Seat pricing is easier to count but can weaken incentives for productivity if unmanaged.
What should the agreement define?
Specify seat type, measurement time, ramp rules, vacancy treatment, included services, rate changes, minimums and approval for additions.
