Neon is a fully managed, serverless Postgres database platform that fundamentally reimagines how developers approach database infrastructure. By separating compute from storage, Neon enables instant provisioning of database instances, scale-to-zero capabilities that eliminate idle costs, and automatic database branching for development workflows.
In 2025, after being acquired by Databricks in May, the platform announced significant pricing reductions that have made serverless Postgres more accessible than ever. Compute costs dropped 15-25% across all tiers, storage pricing fell dramatically from $1.75 to $0.35 per GB-month, and the free plan doubled its compute allowance from 50 to 100 CU-hours per month. These changes reflect Databricks' operational scale and represent a major shift toward more affordable database infrastructure for teams of all sizes.
This comprehensive guide breaks down Neon's 2026 pricing structure in detail, explains how the usage-based billing model works, provides real-world cost examples across different scenarios, and shows how pricing compares to alternative database platforms like AWS Aurora and Supabase.
The Neon Pricing Model: Usage-Based, Not Fixed
Unlike traditional database services that charge fixed monthly fees for provisioned capacity, Neon bills based on actual usage. Your bill is determined by compute hours, measured in CU-hours, storage consumption in GB-months, and optional features like point-in-time recovery and additional branches.
This usage-based approach means you only pay for resources your database actually consumes. Idle databases cost nothing. Databases that scale down during off-peak hours incur minimal charges. This makes Neon exceptionally cost-effective for development environments, ephemeral workloads, and applications with variable traffic patterns.
Neon Pricing Plans Overview
Neon offers a tiered pricing structure designed to support teams at every stage of their journey, from initial prototype development all the way to large-scale production deployments serving thousands of users. Each plan is built around the principle of paying only for what you use, with no charges for idle infrastructure.
| Feature | Free | Launch | Scale |
|---|---|---|---|
| Cost | $0/month | $5/month minimum | $5/month minimum |
| Compute | 100 CU-hours/month | $0.14/CU-hour | $0.222/CU-hour |
| Storage | 0.5 GB/project | $0.3/GB-month (first 50GB), $0.15/GB-month (over 50GB) | $0.3/GB-month (first 100GB), $0.15/GB-month (over 100GB) |
| Auto-scaling | Up to 2 CU | Up to 16 CU | Up to 56 CU |
| Branches | Unlimited | 10 simultaneous, $1.50/month overage | 50 simultaneous, $1.50/month overage |
| PITR | 6 hours or 1 GB | Up to 7 days, $0.20/GB-month | Up to 30 days, $0.20/GB-month |
| SLA | None | Standard | 99.95% guaranteed |
| Compliance | None | Standard | SOC2 Type 2, HIPAA-eligible |
The Free Plan costs $0 per month and is designed for developers building prototypes, running experiments, and learning database concepts. It includes 100 CU-hours per project per month—enough for significant development work without reaching into paid tiers. A CU (Compute Unit) represents 1 vCPU and 4 GB of RAM.
The Launch Plan is a pay-as-you-go offering with a $5 per month minimum spend. It targets startups and growing teams that are scaling beyond the free tier but don't yet require enterprise-grade compliance features. This plan offers lower compute costs and provides sufficient resources for production applications with moderate traffic.
The Scale Plan is also pay-as-you-go with a $5 per month minimum, but is purpose-built for production-grade workloads that require advanced security, compliance, and availability guarantees. It includes SLA commitments, HIPAA eligibility, SOC2 Type 2 compliance, and dedicated support at no additional monthly fee.
For organizations with unique requirements or exceptionally large-scale deployments, Neon offers a Business Plan with custom pricing, dedicated infrastructure, and premium support services tailored to specific operational needs.
Free Plan: $0/Month
The Free plan is a fully-featured offering designed to serve developers, students, and teams building non-production applications. Unlike many cloud database services that offer limited free tiers, Neon's free tier provides genuine database functionality without artificial restrictions that would force you to upgrade prematurely.
The free plan includes 100 CU-hours per project per month, a doubling of the previous 50 CU-hour limit implemented in October 2025. This allowance provides substantial compute capacity—enough to run a 0.25 CU database continuously for 400 hours monthly, or a full 1 CU database for 100 hours. For comparison, 0.25 CU provides 1 vCPU and 4 GB of RAM, suitable for most development and testing scenarios.
Storage limits on the free plan are 0.5 GB per project, with an aggregate limit of 5 GB across up to 10 projects. You can create unlimited database branches within your compute allocation, enabling you to test multiple development branches simultaneously. Point-in-time recovery is included at no charge, providing up to 6 hours of restore history or 1 GB of data changes (whichever comes first). The platform automatically scales your database up to 2 CU during load spikes and scales down to zero when idle, with scale-to-zero always enabled and an automatic 5-minute idle timeout.
Launch Plan: $5/Month Minimum
The Launch plan is a fully usage-based offering with a $5 per month minimum spend, designed for startups and growing teams transitioning from prototype phase to production. The compute cost is $0.14 per CU-hour, which represents a 25% reduction from the pre-acquisition rate of $0.16 per CU-hour. This pricing reflects the operational efficiencies Neon has achieved since becoming part of the Databricks infrastructure.
Storage on the Launch plan costs $0.3 per GB-month for the first 50 GB, dropping to $0.15 per GB-month for additional capacity beyond that threshold. This tiered storage pricing encourages efficient data management while keeping costs affordable as your database grows. The dramatic 80% reduction from the previous $1.75 per GB-month rate makes Neon significantly more competitive for storage-intensive applications.
The Launch plan includes 1,000 projects, each with 10 simultaneous branches at no additional cost. If you need more than 10 concurrent branches per project, additional branches are billed at $0.002 per branch-hour, or approximately $1.50 per branch-month. Point-in-time recovery extends to 7 days of restore history, with billing at $0.20 per GB-month of data changes—allowing you to recover from accidental data loss or corruption with a full week of protection.
Auto-scaling on Launch extends up to 16 CU, allowing your database to automatically adjust compute resources based on traffic patterns. Unlike the free plan, you can disable scale-to-zero entirely if you need your database to maintain constant availability. The plan includes all core Neon features: instant database branching for CI/CD workflows, autoscaling to handle traffic spikes without manual intervention, and instant provisioning for new database instances.
Cost Example: Consider a typical startup SaaS application running on the Launch plan with a 0.5 CU database for 8 hours per day and 10 GB of storage. Monthly compute costs would be 0.5 CU × 240 hours × $0.14 = $16.80, while storage costs $10 GB × $0.3 = $3.00, totaling $19.80 per month. This exceeds the $5 minimum, so you'd pay your actual usage costs.
Postgres that moves at product speed.
Preview environments, safe migrations, and predictable performance.
Launch your backendScale Plan: $5/Month Minimum
The Scale plan is purpose-built for mission-critical production workloads that demand high availability, enterprise compliance, and advanced security features. It is also a pay-as-you-go offering with a $5 per month minimum spend, keeping costs aligned with actual usage even for large-scale operations.
Compute on the Scale plan costs $0.222 per CU-hour, higher than the Launch plan's $0.14 rate but reduced by 15% from the previous $0.26 per CU-hour price. This premium reflects the operational redundancy and infrastructure complexity required to deliver production-grade reliability and compliance capabilities. The higher cost is offset by the inclusion of enterprise features that previously required a separate $700-per-month Enterprise tier.
Storage on Scale costs $0.3 per GB-month for the first 100 GB (higher threshold than Launch), then $0.15 per GB-month beyond. The plan includes 5,000 projects, 10 times more than Launch, making it ideal for multi-tenant SaaS platforms or organizations managing hundreds of customer databases. Each project supports 50 simultaneous branches, far exceeding typical development needs.
Point-in-time recovery extends to 30 days on the Scale plan, billed at $0.20 per GB-month of data changes. This extended window allows you to recover from data corruption or accidents that occurred up to a month ago, critical for compliance with regulations requiring extended data retention and recovery capabilities.
Auto-scaling on Scale extends up to 56 CU, or you can configure fixed compute sizing at up to 56 CU if you prefer predictable compute resources. Scale-to-zero is fully configurable, ranging from 1-minute idle timeouts to always-on operation for applications requiring constant database availability. Beyond the compute and storage included in your usage, the Scale plan adds production-grade features: Private Link for secure, private network connectivity to your database; a 99.95% availability SLA backed by Neon; SOC2 Type 2 compliance certification; HIPAA availability; single sign-on (SSO) for multi-user team management; and dedicated support from the Neon team. Importantly, all these enterprise features are included in your usage-based pricing with no additional monthly surcharge.
The separation between Launch and Scale pricing reflects a fundamental principle: you pay for the actual operational complexity required to support your workload. Launch is optimized for growing teams that can accept shared infrastructure and standard SLA terms. Scale is for organizations that cannot tolerate unexpected downtime, require compliance certifications, or operate in regulated industries.
Neon Pricing Evolution in 2025
2025 was a transformative year for Neon pricing, marked by a series of announcements that dramatically improved the cost-effectiveness of the platform. The changes reflect Databricks' acquisition of Neon in May 2025 and subsequent operational improvements made possible by combining Neon's technology with Databricks' massive infrastructure scale.
In August 2025, Neon introduced a new fully usage-based pricing model fundamentally different from the previous hybrid approach. Compute costs dropped across all tiers by 15-25%, with Launch moving to $0.14 per CU-hour and Scale moving to $0.222 per CU-hour. More dramatically, storage pricing fell from $1.75 to $0.35 per GB-month—an 80% reduction. The company also introduced a $5 per month minimum spend on paid plans, ensuring predictable baseline costs even for very light usage.
Just one month later in September 2025, Neon made another significant move: enterprise-grade features were no longer confined to an expensive separate tier. Private Link, SLA guarantees, SOC2 Type 2 compliance, HIPAA eligibility, single sign-on, and extended point-in-time recovery (up to 30 days) were integrated directly into the Scale plan at no extra monthly fee. Previously, these features required upgrading to a separate Enterprise tier starting at $700 per month. This structural change eliminated the barrier between mid-market and enterprise adoption.
In October 2025, Neon doubled the free plan compute allowance from 50 to 100 CU-hours per month. This change recognized that modern prototypes and side projects often need more compute capacity than the previous free tier provided, making the free plan genuinely usable for meaningful development work.
Collectively, these changes position Neon as the most cost-effective serverless Postgres option on the market. By operating on Databricks' global infrastructure, Neon passes substantial cost savings directly to users—savings that come from hyperscaler-scale purchasing power and optimized infrastructure operations.
Understanding Neon's Billing Components
Understanding Compute Costs
A Compute Unit (CU) is Neon's standardized measure of database compute capacity. One CU provides 1 vCPU and 4 GB of RAM—a reasonable baseline for many applications. Compute usage is measured in CU-hours, representing the sum of compute capacity and time running. For example, if you run a 2 CU database for 3 hours, that consumes 6 CU-hours. If you run a 0.5 CU database for 8 hours, that consumes 4 CU-hours.
Neon's autoscaling architecture is where costs become dramatically lower than traditional databases. You specify a minimum and maximum CU size for your database—for example, 0.25 CU minimum and 4 CU maximum. Neon automatically scales your compute between those bounds based on real-time demand. During quiet periods, your database runs at the minimum size you specify. When traffic spikes, Neon adds compute resources in milliseconds, seamlessly scaling up to handle the load. When traffic drops, Neon scales back down.
The real cost advantage emerges through scale-to-zero functionality. After a configurable idle timeout (5 minutes by default on free and launch plans), Neon automatically pauses compute entirely. Your database still exists—all your data remains safely stored—but you stop accumulating CU-hour charges. The moment a new connection arrives, Neon resumes compute in milliseconds. This capability makes Neon exceptionally cost-effective for development databases, preview environments, and any workload with predictable idle periods.
Storage Billing and Pricing
Storage on Neon is billed based on actual data consumption. Storage is metered hourly and summed over the month, so you only pay for what you actually use, not for the maximum size your database reaches. This granular metering prevents surprise bills caused by temporary spikes in table size. If your database grows to 100 GB during peak hours but shrinks back to 50 GB during off-hours, you'll be billed based on the average, not the peak.
For database branches (clones created from your main database), Neon employs copy-on-write semantics. You're billed for the minimum of either the logical data size of the branch or the accumulated changes from the parent. This approach makes branching exceptionally cost-effective—clones created from a 1 TB database don't immediately cost $1 in storage; they cost almost nothing until data is modified within the branch.
The tiered storage pricing structure reflects Neon's effort to keep costs low while maintaining database performance. On Free and Launch plans, the first 50 GB costs $0.3 per GB-month, with additional capacity at $0.15 per GB-month. Scale plan customers get the first 100 GB at $0.3 per GB-month, then pay $0.15 beyond. This 80% reduction from the previous $1.75 per GB-month rate—implemented after the Databricks acquisition—makes Neon's storage costs among the most competitive in the industry.
Database Branching and Multi-Environment Support
Database branching is one of Neon's defining features, enabling development workflows that parallel Git's approach to code management. Instead of manually cloning entire databases or maintaining separate database instances, you create branches—lightweight copies that share the parent database's storage until you make changes.
The key advantage of Neon's branching system is that it eliminates the need for full database copies. When you branch, Neon uses copy-on-write technology to create a logical fork of the database. New data written in the branch is stored separately, while unchanged data is shared with the parent. This makes branching extremely fast and storage-efficient.
This branching system is ideal for CI/CD pipelines, feature testing, and staging environments. You can create a branch for each pull request, run tests, and delete the branch when finished. Your main database remains clean and stable, while developers can experiment freely without risk.
Cost Comparison: Neon vs Alternatives
When evaluating Neon, it's helpful to compare it against other popular database platforms. The most common alternatives include AWS Aurora Serverless, Supabase, and traditional managed Postgres services.
Neon's primary advantage is scale-to-zero. Aurora Serverless has minimum charges and less aggressive scaling behavior, making it less cost-effective for idle or bursty workloads. Supabase is a full-stack platform, but its managed Postgres pricing can be higher for storage-heavy workloads. Traditional managed Postgres often bills fixed monthly fees, making them expensive for development and testing environments.
In many cases, Neon is the most cost-effective option for variable workloads, while Vela is the best fit for teams that need BYOC deployment, zero vendor access, and deep branching workflows.
Final Takeaways
If you're evaluating serverless databases in 2026, Neon deserves serious consideration. The combination of aggressive pricing, architectural innovations (compute-storage separation, copy-on-write branching), and Databricks-backed infrastructure creates a compelling case for adoption.