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Cloud SLA Calculator

Work out the service credit an SLA breach earns and compare it against what the downtime actually cost the business.

About Cloud SLA Calculator

An SLA converts a percentage into an error budget of minutes, and the credit is a step function of where measured uptime lands rather than a proportional refund. Because the credit is a percentage of the affected service charge, it is bounded by what you spend, while the loss is bounded by what your business earns. Service credits are a pricing mechanism, not insurance: a 25% credit on a $40,000 service is trivial next to a day of lost revenue, which is why resilience engineering is worth more than SLA negotiation. Credit tiers and claim windows differ by provider and contract, so read your own agreement rather than relying on these defaults.

Formula

Cloud SLA

allowed downtime = (1 − target) × period minutes; credit rate is the tier the measured uptime falls into; credit = affected spend × credit rate; loss = downtime hours × loss per hour.

period minutes
Days in the billing period multiplied by 1,440
credit tier
A step function — typically 10% below target, 25% below 99% and 100% below 95%
coverage ratio
Service credit divided by the modelled business loss

Worked example

With the default values below, Cloud SLA Calculator returns Service Credit Due of $4,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Contracted SLA targetaccepts 90–100 %
99.9 %
Measured uptime in the periodaccepts 0–100 %
99.4 %
Days in the billing periodaccepts 1–366 days
30 days
Spend on the affected serviceaccepts 0–20,000,000 USD/month
40,000 USD/month
Credit below the SLA targetaccepts 0–100 % of spend
10 % of spend
Second credit thresholdaccepts 0–100 %
99 %
Credit below the second thresholdaccepts 0–100 % of spend
25 % of spend
Third credit thresholdaccepts 0–100 %
95 %
Credit below the third thresholdaccepts 0–100 % of spend
100 % of spend
Business loss per hour of downtimeaccepts 0–50,000,000 USD/hour
12,000 USD/hour

Results

Service Credit Due
$4,000.00
Credit Rate Applied
10%
Actual Downtime
259.2 minutes
Downtime Allowed by the SLA
43.2 minutes
Downtime Beyond the Allowance
216.0 minutes
Modelled Business Loss
$51,840.00
Credit as a Share of the Loss
7.7%
Outcome
The credit recovers only part of the modelled business loss

Step by step

  1. 1Values used
  2. 2Cloud SLA
  3. 3Service Credit Due= 4,000.00
  4. 4Credit Rate Applied= 10
  5. 5Actual Downtime= 259.2 minutes
  6. 6Downtime Allowed by the SLA= 43.2 minutes
  7. 7Downtime Beyond the Allowance= 216.0 minutes
  8. 8Modelled Business Loss= 51,840.00

Assumptions and limits

  • The result is derived only from the 10 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation or tax into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Cloud SLA calculated?

allowed downtime = (1 − target) × period minutes; credit rate is the tier the measured uptime falls into; credit = affected spend × credit rate; loss = downtime hours × loss per hour. An SLA converts a percentage into an error budget of minutes, and the credit is a step function of where measured uptime lands rather than a proportional refund. Because the credit is a percentage of the affected service charge, it is bounded by what you spend, while the loss is bounded by what your business earns.

Why does Cloud SLA matter?

Service credits are a pricing mechanism, not insurance: a 25% credit on a $40,000 service is trivial next to a day of lost revenue, which is why resilience engineering is worth more than SLA negotiation. Credit tiers and claim windows differ by provider and contract, so read your own agreement rather than relying on these defaults.

What values do I need to enter?

This calculator takes 10 inputs: Contracted SLA target, Measured uptime in the period, Days in the billing period, Spend on the affected service, Credit below the SLA target, Second credit threshold, Credit below the second threshold, Third credit threshold, Credit below the third threshold, Business loss per hour of downtime. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

Do I get the credit automatically?

Usually not. Most providers require you to file a claim within a fixed window, often 30 to 60 days after the incident, with your own evidence of the impact. Credits that nobody claims are simply never paid, so the FinOps team normally owns the process.

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Cloud SLA Calculator – Calculate Service Credit Due