How direct debit works
You give your retailer permission to take payments from a bank account or card. There are two common set-ups:
- Pay each bill in full: the retailer sends your bill as normal, then takes the full amount on or near the due date.
- Bill smoothing: the retailer takes the same amount every week, fortnight or month, based on your expected yearly cost, and reviews it regularly. See billing periods.
Either way you still get a bill showing your usage and charges. Check it before the payment comes out.
Direct debit: pros and cons
Advantages
- You never miss a due date
- Keeps any pay-on-time discount
- Some plans are only available with direct debit
- Bill smoothing spreads winter and summer costs
Watch out for
- A dishonour fee if the account is short of funds
- A wrong or estimated bill is taken before you check it
- Card payments can carry a surcharge
- Smoothing can build up a credit or a debt
Use a buffer
Link the direct debit to an account that always holds a little more than your largest bill, or choose bill smoothing so the amount is small and predictable.
Your rights with direct debit
- Consent: your retailer must have your explicit, informed consent before setting up direct debit.
- Cancelling: you can cancel or change the arrangement by contacting your retailer. You can also contact your bank.
- Disputed bills: if a bill is wrong, contact your retailer before the debit date and ask it to hold the payment.
- Fees: in NSW, Queensland, South Australia, Tasmania and the ACT, fees must be limited to reasonable costs from 1 July 2026. In Victoria, any fee or discount tied to how you pay must reflect the retailer's costs.
- Card surcharges: a surcharge for paying by card must not exceed what it costs the retailer to accept that card.
Setting up or stopping direct debit
Choose full bill or smoothing
Full bill suits a steady budget with savings. Smoothing suits a tight weekly or fortnightly budget.
Set it up with your retailer
Online, in the app or by phone. Have your account details or card ready, and check the date the money will be taken.
Check each bill
Look for estimated reads or unusual charges before the payment date.
Cancel when you leave
When you switch or move, cancel the direct debit after paying the final bill, so no later amount is taken by mistake.
Questions about direct debit
For most households, yes. You never miss a due date and keep any pay-on-time discount. It works best with an account that always holds enough for your largest bill, and when you check each bill before the payment date.
Yes, at any time. Contact your retailer to cancel or change it. You can also contact your bank. Make sure you pay the bill another way so you do not fall behind.
Your retailer will ask you to pay another way, and you may be charged a dishonour fee by the retailer, your bank or both. You may also lose a pay-on-time discount for that bill. Call your retailer quickly to sort it out.
Some retailers add a card surcharge. It must not exceed the cost to the retailer of accepting the card. Paying from a bank account usually has no surcharge.
Yes, unless you contact them. If your bill is estimated and looks wrong, give a self-read and ask your retailer to reissue the bill and hold the payment.
Sources
Every rate on this page comes from the regulator or the regulated retailer. Last checked October 2026. Prices include GST unless we say otherwise.