Tool Use & Function Calling
How do tool definitions affect input token billing?
QUICK ANSWER
Tool schemas are serialized into XML instructions and prepended to the system prompt, counting towards your input token billing. Enable prompt caching for static tool definitions to minimize costs.
Token Overhead Guidelines
A simple tool definition consumes about 150-300 tokens. A large tool set can add several thousand tokens to every request. Use prompt caching (cache_control) at the end of your tool definitions list to avoid paying for tool translation on every turn.
Verified against: Anthropic API Pricing 2026