// the mechanism
API pricing has two sides: input tokens (everything you send — system prompt, history, documents) and output tokens (everything the model writes back). They are priced separately, and output is consistently the expensive direction — on the current first-party tiers the ratio is exactly 5:1, top to bottom of the lineup. Elsewhere it varies but stays in the same region.
Most prompt-optimisation effort goes into the cheap direction. The levers that actually move a single call's bill are all on the output side.
The echo trap
The costliest habit is making the model retype what you already sent. Send a 10,000-token document and ask for "the document with corrections", and those same 10,000 tokens come back as output — you just bought your own file back at five times the price you paid to send it.
The same logic covers extraction and summarisation: ask for the fields, the diff, the verdict — not a restatement. Structured short-form output is a cost lever, not just a convenience.
Thinking bills as output too
Reasoning models spend tokens thinking before they answer, and those tokens are billed at the output rate whether you display the reasoning or not — visibility settings change what you see, not what you pay. On reasoning-heavy calls the thinking can dwarf the visible answer, so "the reply" in your bill includes text you never read.
max_tokens as the hard cap — it is enforced by the API, but the model doesn't see it, so a tight cap truncates rather than shortens. Then put the length you want in the prompt ("answer in two sentences", "return JSON only") — current models follow length instructions closely, and that is what actually makes the reply shorter.The rule
One scope note: this is the per-token picture of a single call. In agent loops the input side dominates through sheer volume, because the whole transcript is re-sent every step — that story is in our agent-cost breakdown. Single calls are won on the output side; loops are won on the input side.
Sources: first-party API pricing tables (ratio verified across all current tiers, 2026-08) · provider docs on reasoning-token billing
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