From 88cae9eb2cc172d426c140a166c13181f0602e8b Mon Sep 17 00:00:00 2001
From: Genmin <joey@joeyroth.com>
Date: Mon, 11 May 2026 16:56:13 -0700
Subject: [PATCH] fix(proxy): honor local litellm_proxy cost overrides

---
 litellm/cost_calculator.py                 | 54 ++++++++++++++---
 tests/test_litellm/test_cost_calculator.py | 69 ++++++++++++++++++++++
 2 files changed, 115 insertions(+), 8 deletions(-)

diff --git a/litellm/cost_calculator.py b/litellm/cost_calculator.py
index 9b4dd80265c..285aa2173ee 100644
--- a/litellm/cost_calculator.py
+++ b/litellm/cost_calculator.py
@@ -1689,6 +1689,36 @@ def get_response_cost_from_hidden_params(
     return None
 
 
+def _should_use_provider_response_cost(
+    provider_response_cost: Optional[float],
+    model: str,
+    custom_llm_provider: Optional[str],
+    custom_pricing: Optional[bool],
+    hidden_params: Union[dict, BaseModel],
+) -> bool:
+    if provider_response_cost is None:
+        return False
+
+    if custom_pricing is not True:
+        return True
+
+    if isinstance(hidden_params, BaseModel):
+        hidden_params_dict = cast(BaseModel, hidden_params).model_dump()
+    else:
+        hidden_params_dict = hidden_params
+
+    hidden_custom_llm_provider = hidden_params_dict.get("custom_llm_provider")
+    is_litellm_proxy_request = (
+        custom_llm_provider == "litellm_proxy"
+        or hidden_custom_llm_provider == "litellm_proxy"
+        or model.startswith("litellm_proxy/")
+    )
+    if is_litellm_proxy_request:
+        return False
+
+    return True
+
+
 def response_cost_calculator(
     response_object: Union[
         ModelResponse,
@@ -1747,14 +1777,22 @@ def response_cost_calculator(
         if cache_hit is not None and cache_hit is True:
             response_cost = 0.0
         else:
-            if isinstance(response_object, BaseModel):
-                if hasattr(response_object, "_hidden_params"):
-                    response_object._hidden_params["optional_params"] = optional_params
-                    provider_response_cost = get_response_cost_from_hidden_params(
-                        response_object._hidden_params
-                    )
-                    if provider_response_cost is not None:
-                        return provider_response_cost
+            if hasattr(response_object, "_hidden_params"):
+                hidden_params = response_object._hidden_params
+                if isinstance(hidden_params, dict):
+                    hidden_params["optional_params"] = optional_params
+                provider_response_cost = get_response_cost_from_hidden_params(
+                    hidden_params
+                )
+                if _should_use_provider_response_cost(
+                    provider_response_cost=provider_response_cost,
+                    model=model,
+                    custom_llm_provider=custom_llm_provider,
+                    custom_pricing=custom_pricing,
+                    hidden_params=hidden_params,
+                ):
+                    assert provider_response_cost is not None
+                    return provider_response_cost
 
             response_cost = completion_cost(
                 completion_response=response_object,
diff --git a/tests/test_litellm/test_cost_calculator.py b/tests/test_litellm/test_cost_calculator.py
index e53484dd287..2598dbe1a81 100644
--- a/tests/test_litellm/test_cost_calculator.py
+++ b/tests/test_litellm/test_cost_calculator.py
@@ -67,6 +67,75 @@ def test_cost_calculator_with_response_cost_in_additional_headers():
     assert result == 1000
 
 
+def test_litellm_proxy_custom_pricing_overrides_response_cost_header():
+    model_id = "proxy-zero-cost-deployment"
+    original_model_cost = litellm.model_cost.get(model_id)
+    litellm.register_model(
+        model_cost={
+            model_id: {
+                "litellm_provider": "litellm_proxy",
+                "input_cost_per_token": 0.0,
+                "output_cost_per_token": 0.0,
+            }
+        }
+    )
+
+    try:
+        response = ModelResponse(
+            model="hosted_vllm/glm-4.7-fp8",
+            choices=[],
+            usage=Usage(prompt_tokens=10, completion_tokens=5, total_tokens=15),
+        )
+        response._hidden_params = {
+            "additional_headers": {"llm_provider-x-litellm-response-cost": "0.123"},
+            "custom_llm_provider": "litellm_proxy",
+        }
+
+        result = response_cost_calculator(
+            response_object=response,
+            model="glm-4.7",
+            custom_llm_provider="litellm_proxy",
+            call_type="completion",
+            optional_params={},
+            cache_hit=None,
+            base_model=None,
+            custom_pricing=True,
+            router_model_id=model_id,
+        )
+
+        assert result == 0.0
+    finally:
+        if original_model_cost is None:
+            litellm.model_cost.pop(model_id, None)
+        else:
+            litellm.model_cost[model_id] = original_model_cost
+
+
+def test_litellm_proxy_uses_response_cost_header_without_custom_pricing():
+    response = ModelResponse(
+        model="hosted_vllm/glm-4.7-fp8",
+        choices=[],
+        usage=Usage(prompt_tokens=10, completion_tokens=5, total_tokens=15),
+    )
+    response._hidden_params = {
+        "additional_headers": {"llm_provider-x-litellm-response-cost": "0.123"},
+        "custom_llm_provider": "litellm_proxy",
+    }
+
+    result = response_cost_calculator(
+        response_object=response,
+        model="glm-4.7",
+        custom_llm_provider="litellm_proxy",
+        call_type="completion",
+        optional_params={},
+        cache_hit=None,
+        base_model=None,
+        custom_pricing=False,
+    )
+
+    assert result == 0.123
+
+
 def test_baseten_model_api_pricing_entries():
     os.environ["LITELLM_LOCAL_MODEL_COST_MAP"] = "True"
     litellm.model_cost = litellm.get_model_cost_map(url="")