How does Iphone hotspot work?

So I have 1gb of data per month on my iphone. If I wanted to change it into a hotspot so that I can use internet on my iPod as I go, how does it work? Does it charge the data by how long the data plan is turned into a hotspot or will the data deplete as if it was connected to my iPod?
~If you haven't noticed, I'm going to steal my brothers phone internet but I just want to know everything about the hotspot thing so that he doesn't have to pay money because I exceeded his gb~

Hotspot works off of the cellular data you are allocated. So if you use more data than you are allocated via your data plan you will be charged for going over. It would be more cost-effective to simply use Wi-Fi.