SLA credits, also called service credits, are reductions on a customer’s bill that the customer may become eligible for when a provider misses a commitment in its service level agreement (SLA), such as availability or repair time. Eligibility is not automatic on every miss: the SLA defines how performance is measured, which events are excluded, how credits are calculated and capped, and how and by when they must be claimed. For buyers, credits are a partial financial remedy and a useful signal of performance, but they rarely cover the real cost of an outage.
At a glance
- A missed SLA target, such as availability, repair time or latency, can make a customer eligible for a credit if the SLA’s measurement, exclusion and claim conditions are met.
- They are usually a percentage of the affected service’s monthly charge, often tiered and capped.
- Many providers require the customer to claim credits within a set window; some apply them automatically.
- Credits typically reduce future invoices rather than paying cash.
- Contracts often make credits the sole remedy for missed service levels unless termination rights are negotiated.
What problem it solves
An SLA without consequences is just a target. Credits give the commitment some teeth: when service falls short and the SLA’s conditions are met, the provider pays at least a little, which encourages it to meet the target and gives the buyer a documented record of failures.
For buyers, credits also create a lever. A history of claimed credits is evidence in a quarterly business review (QBR), a renewal negotiation, or a decision to change providers. Without claiming them, a business may have no formal record that the service underperformed, and a provider’s own monthly reports may show a better picture than users experienced. Claiming consistently, even small amounts, keeps both sides working from the same facts.
How it works
The trigger. The SLA sets measurable targets, such as monthly uptime, time to repair, or latency and packet loss across the provider’s network. A miss is measured according to the SLA’s definitions, which may differ from what users experienced.
The calculation. A common pattern is a tiered schedule: for example, a small percentage of the monthly charge for a minor miss and a larger percentage for longer outages, up to a cap. Credits usually apply only to the affected service at the affected site, not the whole account.
The claim. Many providers require a written claim within a set period, with ticket numbers and outage times. Others credit automatically. Claims outside the window are often rejected.
Exclusions. Scheduled maintenance, customer-caused issues, force majeure and sometimes third-party access are usually excluded. Some SLAs measure availability only from the provider’s own monitoring.
Limits. The master services agreement (MSA) often caps total credits and may make them the sole remedy. Some contracts add a chronic-failure clause that allows termination without fees after repeated misses.
The exact terms depend on the contract, and enforceability depends on its wording and governing law; this is general information, not legal advice. For services where credit terms are a common comparison point, see our dedicated internet access solution page.
When it matters for buyers
- Right after an outage. Record ticket numbers and times, and diary the claim deadline.
- Comparing providers. Look past the headline uptime figure to the credit schedule, caps and exclusions.
- Negotiating contracts. Ask for automatic credits, longer claim windows and a termination right for chronic failures.
- During reviews. Credits paid over the year show whether the service met its commitments.
- Planning resilience. Because credits rarely match business impact, critical sites still need backup connectivity or redundancy.
Questions to ask vendors
- What service levels carry credits, and how is each one measured?
- What is the credit schedule, and what is the maximum credit per month?
- Are credits applied automatically, or do we have to claim them, and by when?
- What events are excluded, including maintenance and third-party access?
- Are credits our sole remedy, or can we terminate after repeated failures?
- Will you report SLA results and any credits we are eligible for in our regular reviews?
How it differs from a service level agreement
A service level agreement (SLA) is the set of commitments itself: what the provider promises on availability, repair time and quality, and how those are measured. SLA credits are the remedy mechanism within it, covering when a miss qualifies for a credit, how the amount is calculated and capped, and how and by when the customer must claim it. Two SLAs with the same headline uptime can be worth very different amounts depending on their credit terms.