Upgrade?

I do not quite understand how much I pay for upgrade to iPhone 4S. When I check to see if I'm elegible to upgrade on my iPhone, I get "As a valued customer, we can offer you an upgrade with a new 2-year commitment and an $18 upgrade fee." Also, when I used the upgrade eligible tool provided from att.com, it says that I qualify for the following iPhone pricing: iPhone 4S: 16GB- $199, 32GB- $299, 64GB- $399. So, I wanted to know, do I just pay the $18 upgrade fee or do I have to pay the fee along with the cost of the iPhone 4S that I am upgrading to?