Tiers can be **incremental** (each band’s rate applies only to the volume within that band) or **retroactive** (crossing a threshold reprices all volume from the first unit at the higher rate). The commercial and accounting consequences are very different, and confusing the two is a common source of dispute.
Retroactive tiers create a cliff: a fraction of a percent of volume can move the entire year’s rate. That makes in-period run-rate tracking — a projected landing tier, updated weekly — far more valuable than an accurate year-end reconciliation.