It is based on the total tokens processed, counting both inputs and outputs from the API. Each token processed contributes to your total bill.

OpenAI API uses token-based pricing with separate costs for input tokens (your prompts) and output tokens (AI responses). Four pricing tiers exist: Batch (50% discount, 24hr processing), Flex (lower cost, variable latency, select models), Standard (default), Priority (2x cost, faster processing). Prompt caching saves 50-90% on repeated content (varies by model). Fine-tuning has separate training costs. Usage is prepaid via credits with no monthly fees. Important: O-series models use 'reasoning tokens' for internal thinking that are billed as output but not shown.

Monthly costs vary by usage: Light use (personal projects) $5-30/month, Medium use (small apps) $30-150/month, Heavy use (production apps) $150-1000/month, Enterprise $1000+/month. Exact costs depend on: model choice (GPT-5 Nano $0.05/$0.40 vs GPT-5 $1.25/$10.00 per M tokens), pricing tier (Batch 50% off, Priority 2x cost), and prompt caching (50-90% savings, varies by model).