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Calcimator

Service Level Agreement Calculator

Calculate SLA penalty credits from uptime targets vs actual performance, with tiered credit models and business impact analysis.

About this calculator

This calculator translates the gap between your SLA's promised uptime and actual measured uptime into both a contractual service credit and a real business-impact figure, and then shows how far apart those two numbers usually are. Using a fixed 730 hours per month, it computes allowed downtime (from the SLA target) and actual downtime (from measured uptime), and the excess beyond what was allowed drives the SLA credit. Two credit models are supported: a linear model that awards 1% credit for every 0.1 percentage point the actual uptime falls below target, and a tiered model — the industry-standard structure most real vendor SLAs use — that jumps between fixed bands (10% credit for a gap up to 0.1 points, rising through 15%, 20%, 25%, up to a 30% credit for anything beyond a 2-point shortfall). Either way, the resulting credit percentage is capped at your specified penalty cap, since virtually all real-world SLAs limit maximum credits to somewhere around 25-30% of the monthly fee regardless of how bad the outage was.

Separately, the calculator estimates your actual business revenue impact from the excess downtime using a revenue-per-hour figure you supply, and computes the unrecovered loss — the gap between what the SLA credits you and what the outage actually cost your business. That gap is usually the most important number here: SLA credits are a contractual remedy sized against the vendor's fee, not against your downstream losses, so a severe outage can leave you significantly undercompensated even when the vendor pays out their maximum contractual credit. Use this to judge whether your SLA's penalty terms are adequate or whether you need separate liability provisions for critical services.

Inputs

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Results

SLA credit amount ($)

$1,500.00

≈ 12 pairs of sneakers

Credit percentage (%)15%
Allowed downtime (min/month)43.8
Excess downtime (hours)2.92
Business revenue impact ($)$2,920.00
Unrecovered loss ($)$1,420.00
Effective monthly cost ($)$8,500.00
Annual Contract Value120,000
Annual Credit Exposure18,000
How to Use This Calculator
  1. Enter Service Fee and the financial penalty for SLA breaches (credits or refunds).
  2. Set Uptime Commitment % and Penalty per Hour of downtime.
  3. Add Response Time requirements and associated penalties.
  4. Review maximum annual credit exposure — most vendors cap credits at 10–30% of monthly fees.
  5. SLA credits are not a substitute for consequential damages — negotiate specific damage provisions for critical services.

How the result changes with Actual uptime (%)

Actual uptime (%)SLA credit amount ($)
50$3,000.00
75$3,000.00
100$0.00

What each input means

Monthly contract value ($)
Monthly fee paid to the service provider.
SLA uptime target (%)
Contracted uptime percentage. Common tiers: 99.9% (three nines), 99.95%, 99.99% (four nines).
Actual uptime (%)
Actual measured uptime percentage for the billing period.
Credit model (0=Linear, 1=Tiered)
0 = Linear (1% credit per 0.1% below SLA), 1 = Tiered (industry-standard brackets: 10-30%).
Penalty cap (%)
Maximum credit as a percentage of monthly fees. Industry standard: 25-30%.
Revenue lost per hour of downtime ($)
Your business revenue impact per hour of provider downtime.

What each result means

SLA credit amount ($)
Service credit owed by the provider based on the SLA breach.
Credit percentage (%)
Percentage of monthly fee credited back.
Allowed downtime (min/month)
Maximum permitted downtime per month under the SLA target. 99.9% = 43.8 min, 99.99% = 4.38 min.
Excess downtime (hours)
Hours of downtime beyond what the SLA allows.
Business revenue impact ($)
Your actual revenue loss from the excess downtime.
Unrecovered loss ($)
Gap between your actual business loss and the SLA credit received.
Effective monthly cost ($)
Your net monthly cost after SLA credits are applied.

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Monthly contract value ($) = 10000, SLA uptime target (%) = 99.9, Actual uptime (%) = 99.5, Credit model (0=Linear, 1=Tiered) = 1 = 6 input(s) provided
  2. Calculate SLA credit amount
    SLA credit amount = monthlyContractValue * (creditPct / 100)
    1500 = $1,500
  3. Calculate Credit percentage
    Credit percentage
    15 = 15%
  4. Calculate Allowed downtime
    Allowed downtime = allowedDowntimeHours * 60
    43.8 = 43.8

Engine last updated . Checked against 3 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.

Frequently Asked Questions

What's the practical difference between the linear and tiered credit models?

The linear model awards credit proportionally and without limit at the tier level — 1% credit for every 0.1 percentage point actual uptime falls below target, so a 1-point shortfall yields a 10% credit and a 3-point shortfall yields 30%. The tiered model instead jumps between fixed bands regardless of exactly how far into a band you are: any gap up to 0.1 points gets 10%, up to 0.5 points gets 15%, up to 1.0 point gets 20%, up to 2.0 points gets 25%, and anything beyond that gets 30%. The tiered model is what the calculator labels the industry-standard structure most vendor SLAs actually use.

Why is there a separate penalty cap when the tiered model already tops out at 30%?

The penalty cap is a second, independent ceiling applied after either credit model computes its percentage — Math.min(creditPct, penaltyCapPct) — so it matters most when you set a cap below 30% (many real contracts cap total credits lower) or when using the linear model, which has no built-in upper bound of its own and could otherwise produce credit percentages well above what's realistic without the cap enforcing a limit.

Why can 'Unrecovered loss' be a large number even when the SLA credit is at its maximum?

SLA credit amount is sized against your monthly contract fee, capped at whatever percentage your penalty cap allows, while revenue impact is calculated independently from your actual revenue-per-hour-of-downtime figure applied to the excess downtime hours. For businesses where an hour of downtime costs far more than an hour's worth of the vendor's monthly fee, the credit — even at its contractual maximum — can fall well short of your real financial loss, and unrecovered loss is exactly that gap.

Why does the calculator use 730 hours as the length of a month?

730 hours is the average length of a month (365 days × 24 hours ÷ 12), used as a standard convention in uptime SLA calculations so that allowed and actual downtime figures are comparable across months of different actual lengths (28 to 31 days) without the SLA math shifting depending on which month you're measuring.

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