Understanding Billing Thresholds in AdWords

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If your AdWords account is signed up for the automatic payments or post pay billing option, you will be billed at regular intervals based on time, or billing thresholds. A billing threshold is a level of spending that, when met, will trigger you to be charged for those costs. If you don’t meet the current spending threshold within a 30 day period, Google will simply charge you every 30 days. If you exceed the current spending threshold within a 30 day period, you will be charged by Google at the time the threshold is exceeded.

What is the amount of the billing threshold? That depends, but it adjusts and becomes larger as you increase your spending. The billing threshold is raised each time your account hits the threshold before 30 days have ended.

To see what your current billing threshold is, click the gear icon IN ADWORDS, choose billing. Then look at the “how you pay” section.

The intervals

The initial billing threshold in AdWords is $50.

So, if your account spends more than $50 before 30 days have passed, you will be charged by Google. The next threshold is $200. The next one is $350. And the highest one is $500.

Here’s an example of how it can work:

You create a new account, and spend $55 in the first week. Since you exceeded the first threshold, Google will charge you.

Your total spending reaches $250 by the end of week two. Google will charge you again once you cross the $200 threshold.

In week three, your total spending reaches $400. Since you crossed another threshold, Google will charge you again.

Before the end of week three, your spending goes up to $600. You then cross the highest threshold of $500, and will be charged again by Google.

So in this scenario, Google will charge you four times before you reach the 30 day time period.

Once you accrued some activity and history, Google will try to normalize your payment schedule, and apply a threshold that’s appropriate for your spending.

Key things to remember

Although the system seems confusing, I think it makes good sense.

The reason why it is set up this way is that after some time, things can be normalized and on a fairly regular schedule. This helps you as an advertiser, because it can help you anticipate when to expect charges from Google.

To be aware of when to expect charges just requires two things,

  1. Know what your threshold is
  2. Watch your spending

Barry--BW Profile Photo--3.5 inch widthHello. My name is Barry, and I love Google AdWords! Would you like to connect with me? If so, send me an email at this address:

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