How we work out the total on your energy bill

How we work out the total on your energy bill

We work out the total on your energy bill based on:

  1. The cost of the energy you've used
  2. Your total daily standing charges
  3. Any refunds, credits or extra charges
  4. The VAT you pay on your energy

Find out more about each part of your bill below.

We need two things to work out the cost of the energy you've used each billing period:

  • The number of energy units you've used (we get this from your meter readings)

  • The amount you pay for each unit (we get this from your tariff's unit rate)

We then multiply the two together to work out the cost.

Your meter readings and decimal places

Here's an example calculation

Your meter tells us how much electricity you've used this month. We subtract last month's reading from the latest reading to find out how much energy you've used.

Latest reading – Last reading = Units used this month

For example: 10500kWh – 10000kWh = 500kWh

Your tariff's unit rate tells us you pay 32.100p for every kilowatt hour (kWh) of electricity you use.

We multiply the two together to work out how much your energy has cost.

Units used X Unit rate = Cost of units used

For example: 500kWh X 32.100p per kWh = £160.50

How we measure your gas use
Your gas meter tells us how many cubic meters (m3) of gas you've used. To keep things simple, we convert this into kWh — using the standard gas conversion calculation used by all energy suppliers.
Find out more about gas bill calculations at gov.uk

Your daily standing charge is the amount you pay every day to help cover the cost of supplying energy to your home.

We need two things to work out your total standing charges on your bill:

  • The number of days covered by your bill
  • The size of the daily standing charge on your tariff

We multiply the two together to work out your total standing charges each month.

Here's an example calculation

Your bill covers 30 days.

Your electricity tariff's daily standing charge is 46.100p per day.

We multiply the two to get your total standing charges for the month.

Number of days X Daily standing charge = Total standing charges

For example: 30 days X 46.100p per day = £13.83

Your bill will tell you if you've had any refunds, credits or extra charges each month.

These are taken into account when we calculate your bill.

UK households pay 5% VAT on their energy bills.

Have a look under 'Your charges in detail' on your bill to see how much VAT you're paying.

Here's an example calculation

The subtotal on your bill is £100.

You pay 5% VAT on that.

We multiply £100 by 0.05 to work the amount of VAT you pay.

£100 X 0.05 = £5 VAT

Your total bill is £100 + £5 = £105.

Your tariff prices and VAT
Your tariff prices — that's your unit rates and daily standing charges — on your bill don't include VAT (it's added on at the end of the bill).
However, tariff prices in your quote, contract, and Tariff Details in MyAccount include VAT.