Glossary
Service credit
Short answer
A service credit is a reduction of fees, usually applied to a future invoice, that a customer receives when a supplier fails to meet an agreed service level. It is commonly a percentage of the monthly fee tied to the size of the miss, and often the customer's sole financial remedy.
By Pactinel editorial teamReviewed on October 22, 2026
Service credits compensate the customer for poor service without proving loss. They are set in the SLA.
How they are structured
| Monthly uptime | Credit (% of monthly fee) |
|---|---|
| Below 99.9% to 99.0% | 10% |
| Below 99.0% to 95.0% | 25% |
| Below 95.0% | 50% |
Example calculation
Monthly fee USD 8,000. Measured uptime for the month is 99.5%, which falls in the first band: credit = 8,000 × 10% = USD 800, applied to the next invoice.
Common conditions
- Claim requirement. The customer must request the credit within a set period, for example 30 days. If it does not, the credit may be lost.
- Cap. Total credits limited to a share of the monthly fee.
- Sole remedy. Credits are the only remedy for the miss, which interacts with limitation of liability.
- Form. Credit against future invoices rather than a cash refund, unless the contract ends.
Because of the claim window, a missed deadline silently forfeits money. Keep a record of each month's measured performance and claim dates.
This is general information, not legal advice.