Understanding your Octopus bill

Octopus Energy bills are cleaner and more straightforward than most suppliers, but there are still a few things worth understanding properly. Once you know what each line means, it takes about thirty seconds to check everything adds up.

The four building blocks

Every energy bill, regardless of supplier, comes down to four components:

Standing charge is a fixed daily fee you pay simply for having a connection to the gas or electricity grid. It covers the cost of maintaining the pipes, wires, meter and distribution network that bring energy to your home. You pay it whether you use any energy or not. It’s shown as a daily rate (around 55p/day for electricity under the current Q1 2026 price cap) multiplied by the number of days in the billing period.

Unit rate is the price per kilowatt-hour (kWh) of energy you actually consume. On the standard Flexible tariff, this is a single rate that stays the same around the clock. On time-of-use tariffs like Agile, Go or Cosy, your bill will show multiple unit rates, each with the consumption split across those different time windows.

Consumption is how many kWh you used during the billing period. If you have a smart meter, this comes from your actual half-hourly readings. If not, it might be estimated based on historical usage patterns.

VAT on domestic energy is charged at 5%, not the standard 20%. This is applied to the total of your standing charges plus usage charges.

How the calculation works

The maths is simple, and you can check live rates on the tariff comparison tool for your area. For a single-rate tariff like Flexible:

(Standing charge per day x number of days) + (unit rate x kWh consumed) + 5% VAT = your bill

For a time-of-use tariff, the usage part splits into separate lines. If you’re on Go, for example, you’ll see one line for off-peak consumption (the overnight hours at the cheaper rate) and another for the daytime rate. Each line shows the rate, the kWh used at that rate and the resulting charge.

Statement vs direct debit

This is where people often get confused. Your statement and your direct debit are two completely separate things.

Your statement shows what you actually used and what it cost. It’s a factual record of your energy consumption for that billing period.

Your direct debit is typically a fixed monthly amount designed to spread your costs evenly across the year. In summer you’ll use less energy than you’re paying for, building up credit. In winter you’ll use more, drawing that credit back down. The point is to avoid a massive bill in January and a tiny one in July. Octopus also offers a variable direct debit option, where they collect the actual amount of each bill shortly after issuing it. This avoids the credit/debit cycle entirely, though winter payments will be noticeably higher than summer ones.

This means your statement total and your fixed direct debit payment will almost never match. That’s completely normal. The running balance on your account (credit or debit) shows the cumulative difference between the two.

Estimated vs actual readings

If you have a smart meter that Octopus can connect to, your bills will be based on real half-hourly readings automatically. There’s nothing to do; it just works. Octopus sends you a bill every month on your chosen day, calculated from those actual readings.

If Octopus doesn’t have a real meter reading for the billing period (perhaps you have a traditional meter, or your smart meter has lost connection), they’ll estimate your usage. The bill will be marked as estimated. These estimates are usually reasonable, based on your historical consumption and typical seasonal patterns, but they can be off.

When a real reading eventually comes in, either from a smart meter reconnecting or from you submitting one manually, Octopus recalculates and corrects the balance. If the estimates were too high, your account gets credited. Too low, and a catch-up charge appears.

The simplest way to avoid estimated bills is to have a working smart meter or to submit readings monthly through the app.

Finding your bills

In the Octopus app, go to Account and then Statements. Each bill is listed with the date, period covered and amount. You can tap into any statement to see the full breakdown: standing charges, unit rates, consumption figures and VAT.

On the website, log into your account and look under the billing section. The same information is available, and you can download statements as PDFs.

Why your first bill might look odd

Your first Octopus bill covers the period from the day your switch completed to your next billing date. Because switches can happen on any day of the month, this initial period might be unusually short (ten days) or unusually long (six weeks). A shorter period means a smaller bill than expected. A longer one means a larger bill. Neither means anything has gone wrong. From the second bill onwards, they’ll settle into a regular monthly cycle.

If you switched from a multi-rate tariff to a single-rate one (or vice versa), the first bill can also look strange because the rate structure has changed. Again, nothing to worry about. Just check the unit rates and consumption figures line by line and the maths should add up.

Gas bills: a quick note

Gas bills include an extra conversion step. Your meter measures gas in cubic metres (m³) or cubic feet (ft³), not in kWh. Octopus converts the volume to kWh using a standard formula that accounts for the calorific value of the gas (how much energy is in each cubic metre) and a volume correction factor. The calorific value is set by your gas transporter and typically sits around 39-40 MJ per m³, which works out to roughly 11.2 kWh per m³ after the full conversion. Your bill will show both the meter reading in m³ and the converted kWh figure.