TL;DR: Seat-based pricing is the original SaaS model: charge per user.
Choosing the right pricing model is crucial for SaaS businesses, as it can significantly impact revenue, customer satisfaction, and market positioning. Seat-based pricing is just one of several common pricing models used in SaaS, each with its own advantages and considerations.
It’s simple, predictable, and works well for products where each additional user creates real value. SaaS companies must consider the best pricing strategy for their product, and seat-based pricing is one of several SaaS pricing strategies available. Seat-based pricing was one of the most popular forms of pricing for many years, but has since lost ground to usage-based pricing models. This guide covers where seat pricing fits today, its downsides, and the modern variations most companies adopt.
Seat-based pricing charges customers a fixed amount for each active user who has access to the product. At its core, it maps cost to one question: “How many people inside this organization need to use your product?” This approach is also known as a user based pricing model or per user pricing, where the fee is determined by the number of users or seats.
It became the default SaaS model because it’s easy to understand and easy to forecast. If you sell a collaboration tool, an internal workflow system, or any product where value grows as more teammates participate, seats map cleanly to value. In contrast, the subscription based pricing model and flat rate pricing model offer access for a single recurring fee, regardless of user count. Seat-based pricing is a key component of the overall pricing structure and can be combined with different pricing tiers to align with customer needs and perceived value.
Seat-based pricing can be found everywhere. Here are good examples of products that seat-based pricing still makes sense for:
Communication tools: Collaborative messaging where each additional user increases value. Examples: Slack, Microsoft Teams, Zoom, Google Workspace
Project & task management: Coordination platforms pricing access for contributors and organizers. Examples: Asana, Jira, ClickUp, Monday.com
Design & collaboration suites: Creation tools where editors pay and viewers are free. Examples: Figma, Miro, Notion, Canva for Teams
Internal departmental systems: Role-based tools priced per operator or team member.Examples: Salesforce Sales Cloud, HubSpot, Zendesk, BambooHR
Seat-based pricing remains appealing for one simple reason: it’s incredibly easy to understand. There are no meters to track, no credits to manage, and no consumption curves to model. The cost is literally the number of people multiplied by the price per person. For buyers comparing vendors within a category, that clarity matters, it removes cognitive load, and makes evaluations more straightforward. This also influences pricing decisions, especially when considering customer demand and the needs of different customer segments within the target market.
It also creates predictable revenue and budgeting on both sides. Finance teams know exactly what they’ll spend each month, and internal champions can forecast future costs based on hiring plans rather than fluctuating usage patterns. Seat-based pricing can help companies ensure their pricing aligns with customer value and present a clear pricing structure on their pricing page, making it easier to communicate value to their customer base. For many companies, especially those with stable team structures, that predictability is a major advantage.
Seat-based pricing is far less popular today than it used to be. Changing customer preferences and the need to respond to customer usage patterns have driven the adoption of alternative SaaS pricing models. Modern SaaS, especially AI-heavy or automation-driven products, has created huge gaps between who uses a product and where the actual value or cost comes from.
In most products, a small number of power users create the majority of value or workload, while the rest of the account consists of occasional or passive users. Seat pricing charges all users the same, which means casual users feel overpriced and high-value users are under-monetized. This mismatch creates friction in expansion and causes customers to prune seats aggressively.
AI workflows let companies do far more with the same number of people. Accounts can double their usage, output, or workload without adding a single additional seat. Under pure seat pricing, this means revenue stays flat even as the product becomes more critical and more costly to operate.
Because revenue maps directly to headcount, hiring freezes, budget cuts, and RIFs immediately reduce seat counts, even if the customer’s reliance on the product hasn’t changed. This makes forecasting harder and compresses revenue during broader market downturns.
PLG depends on free-flowing invites. Seat gating forces internal approvals and slows organic spread across teams. Even inside larger organizations, seat checks create hesitation around inviting occasional or peripheral users, which stalls natural expansion.
Seat-based pricing isn’t outdated, it’s just not universal.
It works beautifully for collaborative tools and predictable internal workflows. But it struggles for AI-heavy, compute-driven, or usage-variable products where value isn’t tied to headcount.
