Knowing how to read your energy bill takes about ten minutes, and it is the fastest way to understand what you pay for. Every bill, whatever the country or supplier, is built from a few parts: how much energy you used, the price per unit, a fixed daily charge and taxes. This guide goes through each part and finishes with a worked example.
In this guide
The parts of a bill
Most electricity and gas bills contain these lines. Names differ by country and supplier, but the roles are the same.
Billing period. The dates the bill covers. A longer period means more kWh, so compare bills of equal length or work with daily figures.
Meter readings. Start and end readings for the period. The difference is your consumption. Readings may be marked as actual, customer-supplied or estimated.
Consumption in kWh. The amount of energy used. For gas, this may need converting from volume. The guide to converting gas m³ to kWh explains the steps.
Unit rate. The price per kWh. Some tariffs have more than one rate, for example a day rate and a night rate.
Standing charge. A fixed daily amount that you pay whatever you use. It covers the supplier's and network's fixed costs.
Taxes and levies. VAT and sometimes other charges. In most consumer bills these are already included in the prices shown, but check the wording.
Total due. Usage charge plus standing charge plus taxes, minus any credit or discount.
Estimated versus actual readings
An estimated reading is a guess based on your past use. If it is too low, the next actual reading brings a catch-up charge. If it is too high, you are lending your supplier money. Send your own meter reading regularly, or use a smart meter, to avoid surprises. Check that the start reading on a new bill matches the end reading on the last one.
The effective price per kWh
The headline unit rate is not what you pay per kWh. The standing charge is spread across your use, so the effective price is higher.
Worked example
A household uses 250 kWh in a month at a unit rate of 0.28 and a standing charge of 0.45 per day. Use the electricity bill calculator to check the numbers.
| Line | Calculation | Amount |
|---|---|---|
| Usage | 250 × 0.28 | 70.00 |
| Standing charge | 0.45 × 365 ÷ 12 | 13.69 |
| Total | 83.69 | |
| Effective price per kWh | 83.69 ÷ 250 | 0.335 |
The standing charge makes up about 16 percent of the bill. For a household that uses 400 kWh a month, the same tariff gives a bill of 125.69 and an effective price of 0.314 per kWh, since the standing charge is spread over more energy.
Why this matters when you compare tariffs
A tariff with a low unit rate and a high standing charge suits a household that uses a lot of energy. A tariff with a higher unit rate and a low standing charge suits a household that uses little. Comparing unit rates alone can lead you to the wrong choice, so calculate the total at your own yearly use.
Look also at the contract terms. A fixed price protects you from rises but may carry an exit fee. A variable price follows the market, which can move up or down. Time-of-use tariffs reward you for shifting use to cheap hours, and they suit homes with an electric car, a battery or a heat pump.
Checks to run on every bill
- Does the billing period match the days you expected?
- Do the start readings match the previous end readings?
- Are the readings actual, not estimated?
- Does the kWh figure fit your normal use for the season?
- Do the unit rate and standing charge match your contract?
- Are there extra lines for rentals, levies or past debts?
If something looks wrong, contact your supplier with the bill and your own reading. If the supplier does not resolve it, most countries have an energy ombudsman or regulator that handles complaints.
Gas and electricity side by side
Electricity and gas bills share the same structure, but gas adds a conversion step from volume to energy. When you compare the cost of heating with gas against a heat pump, convert both to cost per kWh of heat. The heat pump vs gas boiler guide shows how.
Frequently asked questions
What is a kWh?
It is the energy used by a 1,000 W appliance running for one hour. Our guide to kW vs kWh explains the difference between power and energy.
Why is my bill higher in winter?
Heating, longer lighting hours and more time indoors increase use. A bill that is much higher than last winter's deserves a check of readings and rates.
Can I change my standing charge?
Not within a tariff. You can switch to a tariff with a different structure.