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stage: Fulfillment
group: Purchase
info: To determine the technical writer assigned to the Stage/Group associated with this page, see https://about.gitlab.com/handbook/engineering/ux/technical-writing/#assignments
---

# Quarterly reconciliation and annual true-ups **(PREMIUM)**

GitLab reviews your seat usage and sends you an invoice for any overages.
This review can occur:

- **Annually**. This process is also known as **the annual true-up process**. This process requires you to pay the full annual subscription fee
  for users added anytime during the year.
- **Quarterly**. With this process, you pay only for the remaining period of your subscription term.

## Quarterly reconciliation vs. annual true-ups

Quarterly reconciliation can result in substantial savings.

Let's say in January you purchased an annual license for 100 users. This chart shows your usage during the year.
The number of users went up and down, with 120 as the maximum. The dark purple indicates the most users you had each quarter.

![License overview](img/quarterly_reconciliation.png)

If you are being billed annually:

- During the year, you went over the license by 20 users.
- If we pretend each extra seat is $100, then you pay $100 x 20 users.

Annual total: **$2000**

If you are being billed quarterly, you pay for the maximum number of seats you used during the quarter,
and for only the remaining quarters.

Using the same example, if a seat is $100 per year, then it is $25 per quarter.

- In Q1, you had a maximum of 110 users. 10 users over license x $25 per user x 3 quarters = **$750**
  The license is now paid for 110 users.

- In Q2, 105 users was the maximum. You did not go over 110 users, so no charge.

- In Q3, you had 120 users. 10 users over license x $25 per user x 1 remaining quarter = **$250**
  The license is now paid for 120 users.

- In Q4, you had 120 users. You did not exceed the number of users. However, if you had, you would not be charged, because in Q4, there are no charges for exceeding the number.

Annual total: **$1000**

With quarterly reconciliation, you pay less annually.

If it's not possible for you to participate in quarterly reconciliations, you can opt out of the
process by using a contract amendment. In that case, you default to the annual review.

## Timeline for quarterly invoicing and payment

At the end of each subscription quarter, GitLab notifies you about overages.
The date you're notified about the overage is not the same as the date
you are billed.

### GitLab SaaS

Group owners receive an email **on the reconciliation date**.
The email communicates the [overage seat quantity](gitlab_com/index.md#seats-owed)
and expected invoice amount.

**Seven days later**, the subscription is updated to include the additional
seats, and an invoice is generated for a prorated amount. If a credit card
is on file, a payment is automatically applied. Otherwise, an invoice is
sent and subject to your terms.

### Self-managed instances

Admins receive an email **six days after the reconciliation date**.
This email communicates the [overage seat quantity](self_managed/index.md#users-over-license)
and expected invoice amount.

**Seven days later**, the subscription is updated to include the additional
seats, and an invoice is generated for a prorated amount. If a credit card
is on file, a payment is automatically applied. Otherwise, an invoice is
sent and subject to your payment terms.
