Quick Answer
Last verified:

Terraform pricing varies by team size and features, ranging from $0 to $0.99 per resource/month in 2026. Your actual cost depends on the tier you choose, contract length, and negotiated discounts.

Use the interactive pricing calculator to estimate your exact cost based on team size and requirements.

  • Free tier: Yes
  • Billing: Monthly and annual (save 15-20%)
  • Hidden costs: Add ~35% for implementation, support, and training

Terraform offers 6 pricing tiers: Free (Open Source), HCP Terraform (Free Tier), HCP Terraform Essentials, HCP Terraform Standard, HCP Terraform Premium, Terraform Enterprise (Self-Managed). Standard paid plans include Free (Open Source) at $0/free, HCP Terraform (Free Tier) at $0/free up to 500 resources, HCP Terraform Essentials at $0.1/resource/month ($0.0001359/resource/hour). The HCP Terraform (Free Tier) plan is small teams wanting remote state management and collaboration up to 500 resources.

Compared to other developer tools software, Terraform is positioned at the budget-friendly price point.

Last verified: January 2026 | Sources: 6 pricing pages and reviews

Terraform by HashiCorp (now an IBM company) is the most widely adopted infrastructure-as-code (IaC) tool, enabling teams to define, provision, and manage cloud infrastructure using declarative configuration. With support for 3,000+ providers spanning AWS, Azure, GCP, Kubernetes, and hundreds of SaaS services, Terraform has become the de facto standard for multi-cloud infrastructure management. The tool is used by organizations from startups to Fortune 500 companies to version-control and automate their infrastructure.

Terraform pricing has two components: Terraform CLI is free and open source (BSL license), while HCP Terraform (the managed cloud platform) charges per managed resource per month. The pay-as-you-go model starts with a 500-resource free allowance, then scales at $0.10 (Essentials), $0.47 (Standard), or $0.99 (Premium) per resource per month, billed hourly on peak usage. Terraform Enterprise offers self-managed deployment with custom pricing.

In this guide, we break down Terraform's pricing from free CLI through Enterprise self-managed, explain the Resources Under Management (RUM) billing model, compare Terraform to alternatives like Pulumi and OpenTofu, and reveal hidden costs including peak-based hourly billing, resource count inflation, and the upcoming free tier sunset that could impact your infrastructure budget.

All Terraform Plans & Pricing

Plan Monthly Annual Best For
Free (Open Source) State management: Local onlyCollaboration: Manual (file-based state sharing) Free Free 0 Individual developers and small teams comfortable managing state locally
HCP Terraform (Free Tier) Managed resources: 500Policy sets: 1 (up to 5 policies) Free Free 0 Small teams wanting remote state management and collaboration up to 500 resources
HCP Terraform Essentials Managed resources: Unlimited (pay per resource)Billing: Hourly based on peak resource count $0.1 /resource/month ($0.0001359/resource/hour) Custom Teams getting started with paid IaC management who need basic governance and cost estimation
HCP Terraform Standard Managed resources: Unlimited (pay per resource)Billing: Hourly based on peak resource count $0.47 /resource/month ($0.00064/resource/hour) Custom Mid-size teams needing drift detection, audit logging, and advanced governance
HCP Terraform Premium Managed resources: Unlimited (pay per resource)Billing: Hourly based on peak resource count $0.99 /resource/month Custom Enterprises needing full feature access, advanced compliance, and priority support
Terraform Enterprise (Self-Managed) Managed resources: Custom pricingDeployment: Self-managed on your infrastructure Contact Contact Large enterprises requiring self-hosted deployment, air-gapped environments, and full data sovereignty
View all features by plan

Free (Open Source)

  • Terraform CLI (open source, BSL license)
  • Infrastructure as Code provisioning
  • HCL configuration language
  • Provider ecosystem (3,000+ providers)
  • Local state management
  • Community modules and providers
  • Community support

HCP Terraform (Free Tier)

  • Remote Terraform execution
  • VCS integration (GitHub, GitLab, Bitbucket)
  • Private module registry
  • Remote state storage and locking
  • Single sign-on (SSO)
  • Policy enforcement (1 policy set, up to 5 policies)
  • Run tasks
  • Up to 500 managed resources

HCP Terraform Essentials

  • Everything in Free tier
  • Unlimited managed resources
  • Project-scoped access controls
  • Team-based permissions
  • Cost estimation
  • Webhook notifications
  • Run tasks integration
  • $500 trial credit included

HCP Terraform Standard

  • Everything in Essentials
  • Drift detection
  • Audit logging
  • Ephemeral workspaces
  • Policy sets with VCS repository connections
  • Multiple policy set versions via API
  • Enhanced governance and team tools
  • $500 trial credit included

HCP Terraform Premium

  • Everything in Standard
  • All HCP Terraform features included
  • Advanced security and compliance
  • Custom roles and permissions
  • Priority support with SLA
  • Advanced run tasks
  • Concurrent runs at scale
  • $500 trial credit included

Terraform Enterprise (Self-Managed)

  • All HCP Terraform Premium features
  • Self-hosted deployment
  • Air-gapped installation support
  • Custom networking and security
  • Full data sovereignty
  • Custom integrations and APIs
  • Dedicated support and SLA
  • Custom contract terms
Visit Terraform Website

Get a custom Terraform quote

Enter your work email and we'll send you a detailed cost breakdown.

No spam. Unsubscribe anytime.

Hidden Costs to Budget For

Watch for 6 hidden costs
  • Hourly peak billing: HCP Terraform charges based on the highest number of managed resources in any given hour, not averages - a temporary scale-up to 2,000 resources during deployment means you pay for 2,000 that entire hour even if it drops back to 500
  • Resource count inflation: every resource in a Terraform-managed state file counts toward billing, including resources you might not consider significant (security groups, IAM policies, DNS records) - a single Kubernetes cluster can generate 100+ managed resources
  • Tier pricing jumps are steep: Essentials at $0.10/resource/month vs Standard at $0.47/resource/month is a 370% increase for features like drift detection and audit logs that many teams consider essential
  • Migration costs from the sunsetting free tier: the legacy free plan ends March 31, 2026, forcing teams to migrate to pay-as-you-go or alternative tools - budget for migration engineering time
  • Multi-product HashiCorp costs: Terraform often pairs with Vault, Consul, and Nomad, each with separate HCP pricing that compounds total HashiCorp spend significantly
  • State file management overhead: teams managing many workspaces generate more managed resources than expected, as each workspace's state file contributes independently to the resource count
Tip

Ask your Terraform sales rep about these costs upfront. Getting them in writing before signing can save you from surprise charges later.

Full hidden costs breakdown →

Frequently Asked Questions

01 How much does Terraform cost?

Terraform CLI is free and open source (BSL license). HCP Terraform (cloud-managed) offers a free tier up to 500 resources. Paid tiers charge per managed resource per month: Essentials at $0.10/resource, Standard at $0.47/resource, and Premium at $0.99/resource. Billing is hourly based on peak resource count. A team managing 1,000 resources on Essentials pays approximately $100/month.

02 Is Terraform free?

Yes, Terraform CLI is free and open source under the Business Source License (BSL). You can use it locally with no cost. HCP Terraform also offers a free tier with remote state management, VCS integration, and policy enforcement for up to 500 managed resources. However, the legacy free tier is sunsetting March 31, 2026, transitioning to a pay-as-you-go model with a 500-resource free allowance.

03 What is Terraform?

Terraform is an infrastructure-as-code (IaC) tool by HashiCorp (now IBM) that lets you define and provision cloud infrastructure using declarative configuration files (HCL). It supports 3,000+ providers (AWS, Azure, GCP, Kubernetes, etc.) and enables reproducible, version-controlled infrastructure management. HCP Terraform adds remote execution, state management, governance, and team collaboration.

04 Terraform vs Pulumi?

Terraform uses HCL (domain-specific language) while Pulumi uses general-purpose languages (Python, TypeScript, Go). Terraform has a larger provider ecosystem (3,000+) and broader community. HCP Terraform pricing is resource-based ($0.10-$0.99/resource/month), while Pulumi Cloud charges per resource ($0.0005/resource/hour on Team). For teams familiar with programming languages, Pulumi may feel more natural; for standardized IaC, Terraform's HCL provides better governance.

05 What is a managed resource in HCP Terraform?

A managed resource is any resource in an HCP Terraform-managed state file where mode equals 'managed'. This includes cloud infrastructure like EC2 instances, S3 buckets, security groups, and DNS records. Some resource types like null_resource and terraform_data are excluded from billing. Each resource is billed hourly based on peak count, and partial hours count as full hours.

06 Is HCP Terraform's free tier going away?

The legacy user-based free tier is sunsetting March 31, 2026. HashiCorp is transitioning to a pay-as-you-go model where the first 500 managed resources are free. Teams currently on the free tier should plan to either stay under 500 resources, upgrade to a paid plan, or migrate to an alternative like OpenTofu, Spacelift, or env0.

07 How does HCP Terraform billing work?

HCP Terraform bills hourly based on peak managed resources. Each hour, your bill is calculated at the highest resource count reached during that hour, multiplied by the per-resource hourly rate for your tier (Essentials: $0.0001359, Standard: $0.00064). Partial hours are billed as full hours. Each paid tier includes a $500 trial credit that depletes at the tier's rate.

08 What's the difference between Terraform and OpenTofu?

OpenTofu is an open-source fork of Terraform created in 2023 after HashiCorp changed Terraform's license from MPL to BSL. OpenTofu is community-maintained under the Linux Foundation, fully open source (MPL 2.0), and aims for compatibility with Terraform. Choose OpenTofu for fully open-source IaC; choose Terraform/HCP for HashiCorp's managed platform, enterprise support, and ecosystem stability.