Calculate API Costs — OpenAI, Claude, and More
Estimate monthly API costs based on request volume, token usage, and model selection.
Understanding API Token Pricing
AI APIs charge per token — roughly 4 characters or 0.75 words. A 500-word prompt ≈ 670 tokens. Pricing is split between input (your prompt) and output (the response). Output tokens cost 2-5x more than input tokens. At scale, model selection dramatically affects cost — GPT-4o-mini and Claude Haiku cost 10-20x less than their larger siblings with surprisingly good quality for many tasks.
Optimizing API Costs
Use smaller models for simple tasks. Haiku/GPT-4o-mini handle classification, extraction, and simple Q&A at 1/20th the cost. Minimize output tokens — set max_tokens appropriately. Cache repeated prompts — many API providers offer prompt caching discounts. Batch requests — Anthropic and OpenAI offer 50% discounts on batch/async requests.
The single biggest API cost mistake: using GPT-4 or Claude Opus for every request. Route simple tasks (classification, formatting, short answers) to cheap models (Haiku, GPT-4o-mini) and reserve expensive models for complex reasoning. This hybrid routing approach cuts costs 60-80% with minimal quality impact.
