What Is 95th Percentile Bandwidth Billing?

The 95th percentile billing method measures bandwidth based on peak usage while ignoring brief spikes. Instead of charging for every unit of data transferred, it focuses on sustained demand. Here is how the method works:

1. Data Collection: Bandwidth usage is sampled at regular intervals (commonly every 5 minutes) throughout the month.
2. Data Sorting: All collected usage points are sorted in ascending order.
3. Top 5% Removed: The highest 5% of measurements (covering roughly 36 hours per month) are discarded.
4. 95th Percentile Value: The next highest remaining value sets your billable bandwidth rate.

Why Is the 95th Percentile Method Popular?

• Avoids Unfair Spikes: Short-term traffic surges are ignored, preventing sudden cost jumps.
• Encourages Efficient Usage: Customers benefit from keeping sustained usage under control.
• Predictable Monthly Costs: Safer and more stable than total-transfer or burstable billing models.

How the 95th Percentile Is Calculated

1. Total Data Points: A 30-day month with 5-minute polling = 8,640 samples.
2. Remove Top 5%: 8,640 × 0.05 = 432 highest samples removed.
3. 95th Percentile Value: The next highest value (the 8,208th point) becomes the billable Mbps rate.
4. Billing Example: If the 95th percentile value is 100 Mbps at £1/Mbps, the charge is £100.

Benefits of 95th Percentile Billing

• Cost-Effective: Removes short bursts that would inflate costs.
• Flexible for Growth: Ideal for businesses with irregular or variable usage.
• Useful Performance Insights: Helps plan capacity and optimise network behaviour.

Tips to Manage 95th Percentile Billing

1. Monitor Bandwidth Trends: Tracking usage helps reduce unnecessary peaks.
2. Optimise Network Traffic: Load balancing and shaping can level out spikes.
3. Plan Long-Term Capacity: Expect growth and upgrade before consistent peaks begin to cost more.

95th percentile billing offers a fair, balanced approach between performance and cost, especially for colocation, dedicated servers, and enterprise connectivity.