Energy Bill Calculator: Work Out Your Electricity & Gas Costs

Quick answer

Your energy bill = standing charge × days + unit rate × kWh used, for gas and electricity separately. Ofgem's typical household uses about 2,700 kWh of electricity and 11,500 kWh of gas a year; enter your own rates above because the price cap changes every three months.

Estimate your bill with the energy bill calculator above

Pop in your unit rate (pence per kWh), your daily standing charge and how much energy you use, and the tool returns your cost for the day, month and year. If you only know your annual kWh from a recent bill, enter that; if you're costing a single appliance, use its wattage and hours of use. The calculator does the arithmetic so you can focus on the decisions.

Understanding kWh and unit rates

A kilowatt-hour (kWh) is the unit your supplier charges by. One kWh is the energy used by a 1,000-watt appliance running for one hour. A 2,000-watt fan heater on for 30 minutes also uses 1 kWh. Your meter measures total kWh consumed, and the difference between two readings is what you're billed for.

Your unit rate is the price per kWh, shown in pence on your bill. Electricity and gas have separate unit rates, and gas is usually far cheaper per kWh than electricity. The exact figures depend on your tariff, region and meter type, which is why an energy bill calculator asks you to enter your own rates rather than assuming a national number. Rates differ across England, Scotland, Wales and Northern Ireland, and even within those nations by distribution region, so always read your rate off your latest statement.

Crucially, energy is one of the few items that carries the reduced 5% rate of VAT rather than the standard 20%. Domestic gas and electricity are charged at 5% VAT, and the unit rates printed on most household bills already include it. You normally won't need to add anything on top, but it's worth knowing when you compare a quote that excludes VAT.

Standing charges explained

A standing charge is a fixed daily fee you pay just for being connected, regardless of how much energy you use. It covers maintaining the network, meter reading and other supply costs. You pay one standing charge for electricity and a separate one for gas, every single day, even when you're away.

This matters because standing charges can make a low-usage home's bill higher than expected. If you barely use any gas in summer, the standing charge still ticks over at, say, 30p a day, which is roughly £9 across a 30-day month before you've burned a single unit. Any honest energy bill calculator adds the standing charge on top of your usage cost, and so does ours.

How the energy bill calculator works

The formula behind the tool is short and easy to check by hand:

• Usage cost = kWh used × unit rate (in pounds per kWh)
• Standing charge total = daily standing charge × number of days
• Total bill = usage cost + standing charge total

Because unit rates are quoted in pence, divide by 100 to get pounds. So a 27p unit rate becomes £0.27 per kWh. If you're starting from an appliance rather than a meter reading, first convert watts to kilowatts and multiply by hours:

• kWh used = (appliance watts ÷ 1,000) × hours run

Feed that kWh figure into the usage cost line and you have the running cost of any device. The same method works for gas, electricity, a tumble dryer or a whole year's heating. The only thing that changes is the unit rate you type in.

Worked example: Priya's monthly electricity bill

Priya rents a two-bed flat in Cardiff and wants to check her electricity direct debit is fair. Her latest bill shows a unit rate of 27p per kWh and a standing charge of 53p per day. Over a typical 30-day month she uses 250 kWh.

• Usage cost = 250 kWh × £0.27 = £67.50
• Standing charge = £0.53 × 30 days = £15.90
• Total electricity bill = £67.50 + £15.90 = £83.40 for the month

Her supplier was taking £95 a month by direct debit, so she was building a credit balance she could ask to have reviewed. Over a year, Priya's electricity works out at roughly £83.40 × 12 = £1,000.80, assuming her usage stays steady, which it won't entirely, because winter pushes consumption up.

Worked example: the cost of running an appliance

Say Priya runs a 2,500-watt tumble dryer for one hour, three times a week. First convert to kWh per cycle: 2,500 ÷ 1,000 = 2.5 kW, multiplied by 1 hour = 2.5 kWh per load. At her 27p unit rate that's 2.5 × £0.27 = 67.5p per load. Three loads a week is £2.03, and across a year that single appliance adds about £105 to her electricity. Air-drying half those loads would roughly halve that cost.

This is where an energy bill calculator earns its keep: it turns a vague worry into a number you can act on. A 9-watt LED bulb left on all evening costs pennies; a 3,000-watt electric shower or a poorly insulated immersion heater is where the real money goes.

Electricity vs gas: don't mix the rates

If you have both an electricity and a gas supply, run the calculation twice with the correct unit rate and standing charge for each, then add the two totals. Gas typically costs much less per kWh than electricity but you usually use far more of it for heating and hot water, so the gas bill can still be the larger of the two in winter. Treat them as two separate sums and you'll avoid the most common error people make when costing a home.

What affects the rate you pay

Several things move your unit rate and standing charge, and none of them are in the calculator's control, which is why you enter your own figures:

• Your region. Network costs vary across Great Britain, so two identical tariffs can cost different amounts in, say, the South West versus Yorkshire. Northern Ireland has a separate energy market entirely.
• Your meter and payment method. Prepayment, standard credit and direct debit tariffs price differently. Economy 7 and other time-of-use tariffs have separate day and night rates, so you'd calculate each block of usage at its own rate.
• The price cap. In England, Scotland and Wales, Ofgem sets a cap on the rates a supplier can charge on a standard variable tariff. It limits the unit rate and standing charge, not your total bill, so using more still costs more. You can read how it works on Ofgem's price cap guidance.

Lowering your energy bill

Once you can see the breakdown, the levers are obvious. Cutting kWh is the only way to reduce the usage portion, while switching tariff is the way to attack the unit rate and standing charge.

• Target the high-wattage appliances. Heating, hot water, tumble dryers and electric showers dominate. Trimming their use moves the needle far more than switching off standby lights, though every bit helps.
• Take regular meter readings. Estimated bills are a frequent source of nasty surprises. A real reading keeps your direct debit honest and stops a hidden debt or credit building up.
• Check your direct debit against the maths. If the calculator shows your annual cost is well below what you pay monthly, you may be in credit and can ask for a refund or a lower payment.
• Compare standing charges, not just unit rates. A headline-cheap unit rate with a steep standing charge can cost a light user more overall. Run both tariffs through the calculator before you switch.

If energy is one line in a wider budgeting exercise, it helps to see it next to everything else. Our budget calculator lets you slot your energy total into a full monthly plan, and the cost of living calculator puts it in context against rent, food and travel.

Common mistakes to watch for

A few errors crop up again and again when people work out energy costs by hand:

• Forgetting the standing charge. Multiplying kWh by the unit rate alone understates the bill. The fixed daily charge can add £200 or more a year across both fuels for many homes.
• Confusing watts and kilowatts. A 2,000-watt heater is 2 kW, not 2,000 kWh. Always divide watts by 1,000 before multiplying by hours.
• Using the gas rate for electricity, or vice versa. They are different prices entirely. Mixing them produces a wildly wrong figure.
• Assuming a flat rate on Economy 7. If you have a day and night rate, calculate each separately. Running the dishwasher at the cheaper night rate genuinely changes the answer.
• Double-counting VAT. Domestic energy already includes 5% VAT in the rates on your bill. Adding 20% on top inflates the result. Only add VAT if you're working from an ex-VAT quote, and even then it's the reduced 5% rate for home energy.
• Treating one month as the whole year. Winter usage can be two or three times a summer month. Use an annual kWh figure from your statement for a realistic yearly estimate rather than scaling up a quiet month.

If your home runs an electric car, charging is best costed on its own because it can dwarf every other appliance. Our EV charging cost calculator handles that, and the fuel cost calculator does the same job for petrol and diesel journeys.

These figures are estimates for guidance only and not personal financial advice. Always check your latest bill and tariff for the rates that apply to you.

Related calculators

Costing the things that drive a household budget is easier when the tools talk to each other. Compare the running cost of charging a car with the EV charging cost calculator, price up journeys with the fuel cost calculator, and fold the lot into a full plan with the budget calculator or the cost of living calculator.

Typical UK annual energy use (Ofgem profiles)

Current cap rates: Ofgem energy price cap. Struggling with bills? Check the benefits checker for Warm Home Discount and support, and plan with the budget calculator.