2026-07-09 · Levi

How to Calculate AI Automation Costs: 2026 Method and LLM API Pricing for Hong Kong SMEs

Open formula, disclosed assumptions, verified against official pricing pages in July 2026.

AI cost calculation LLM API pricing Hong Kong SME AI ROI

When evaluating AI automation, Hong Kong SME decision-makers typically encounter a situation where vendors provide summary conclusions like "80% cost savings" with the calculation kept closed. This article takes the opposite approach — publishing the full formula, every assumption, and LLM API official prices verified in July 2026, so you can run the numbers with your own figures.

The Shared Structure of Any Automation Workflow

A garment factory's quotation requests, insurance document comparison, and logistics information consolidation look like three different industries. The calculation method is identical, because they share one structure: unstructured data converted to structured output. Four common archetypes: document data extraction (invoices, contracts, spec documents → structured fields), query and quotation replies (customer inquiry → draft response), information consolidation and summarisation (reports, news → key points), classification and routing (emails, tickets → automatic categorisation). Industry differences show up in three parameters: monthly volume, manual minutes per item, document length. The calculation structure is identical.

Baseline: Current Manual Cost

Monthly manual cost = minutes per item × items per month × cost per minute

Cost per minute = average monthly salary ÷ (22 working days × 8 hours × 60 minutes) = salary ÷ 10,560

Example: average salary HK$18,000, cost per minute ≈ HK$1.70. Assume 300 documents per month, 20 minutes manual per document: 6,000 minutes × HK$1.70 ≈ HK$10,227 per month.

When multiple colleagues share the process, input the average salary — total cost is determined by total minutes, headcount is a derived variable. A useful back-check: 6,000 minutes is approximately 0.57 FTE. If two or three colleagues are actually involved in this process, either per-item time or monthly volume is underestimated — correct the inputs and recalculate.

Variable Cost: LLM API Fees (July 2026 Official List Prices)

Token is the LLM billing unit. One page of mixed Chinese-English content is approximately 800 tokens; the actual figure varies by language and each model's tokeniser. Current main model list prices from three providers (USD per million tokens, verified 5 July 2026):

Economy tierGPT-5.4 nano: $0.20 / $1.25
Gemini 3.1 Flash-Lite: $0.25 / $1.50
Claude Haiku 4.5: $1.00 / $5.00

Standard tierGemini 3.5 Flash: $1.50 / $9.00
GPT-5.4: $2.50 / $15.00
Claude Sonnet 4.6: $3.00 / $15.00

Premium tierGemini 3.1 Pro: $2.00 / $12.00
Claude Opus 4.8: $5.00 / $25.00
GPT-5.5: $5.00 / $30.00

FormatInput price / Output price (USD/M tokens)
Full comparison: API pricing article

Per-item cost calculation (standard tier Claude Sonnet 4.6): Input 8 pages × 800 tokens + 600 tokens instructions ≈ 7,000 tokens → US$0.021; Output 600 tokens → US$0.009; Subtotal US$0.030; With ×1.3 system overhead → US$0.039; At 1 USD = 7.8 HKD: ≈ HK$0.30 per item. 300 items per month: ≈ HK$91.

Comparison: Where the Cost Weight Sits

Monthly operating cost of AI solution = API fees + human review cost. Assuming review takes 30% of the original processing time:

Current manual: HK$10,227/month

AI solution: HK$91 (API) + HK$3,068 (review) = HK$3,159/month

Monthly difference ≈ HK$7,068, approximately HK$84,800 per year

Note one ratio: API fees represent only 2.9% of AI solution costs. The cost weight is in integration quality and human review process design — model unit price is secondary. When evaluating a proposal, asking "how is integration done and how is review designed" is more cost-revealing than asking "which model is used."

One-time build cost sits outside the monthly figures above. Payback period = build cost ÷ monthly difference. At HK$60,000 build cost, payback is approximately 8.5 months. For the complete cost layer analysis, see The True Cost of AI Automation.

Boundaries of the Estimate

The 30% review ratio is an assumption; the actual figure depends on document quality and model accuracy — the gap between a cleanly printed PDF and a handwritten note can be substantial. Token-per-page conversion varies by language and tokeniser. API list prices change; prices in this article were verified 5 July 2026 — check official pages before finalising budgets. All three providers offer approximately 50% discounts on Batch API, and cached content reads at roughly 10% of standard input price — this article uses standard real-time pricing as a conservative estimate.

Calculate With Your Own Numbers

The four variables (monthly volume, minutes per item, average salary, pages per document) can be entered directly in the interactive calculator for an instant cost comparison for your company: AI Automation Cost Calculator

Document quality and process details vary by company. To validate the above assumptions with real document samples and build a cost model specific to your workflow, reach out at smartai.hk+ai.consulting@proton.me to schedule a 15-minute AI assessment.