How pay-on-time discounts work
The discount is usually a percentage off usage charges, or off usage and supply charges, and it only applies if the full bill is paid by the due date. Some plans tie the discount to paying by direct debit or getting bills by email instead.
A plan advertised at 20% off is not necessarily cheaper than a plan with no discount. What matters is the price after the discount, and the price if you miss the condition.
| Plan | Pay on time | Pay late once a year |
|---|---|---|
| No discountSimple plan at the base price | $1,932 | $1,932 |
| 10% pay-on-time discountRates 8% higher before the discount | $1,878 | $1,930 |
Paying on time every quarter, the discounted plan is $54 a year cheaper. Miss one quarterly due date and most of that gain disappears. Miss two and the plan costs more than the simple one.
The rules on pay-on-time discounts
| Where | Rule |
|---|---|
| Victoria | The ESC capped pay-on-time discounts on new contracts from July 2020, most recently at 6.62% for 2024-25 and 5.93% for 2025-26. From 1 July 2026 the discount must instead reflect a reasonable estimate of the retailer's costs. |
| NSW, Qld, SA, Tas, ACT | From 1 July 2026, retailers must remove unreasonable conditions on discounts in existing contracts and apply the discount in full. Fees must be limited to reasonable costs, and unreasonably high late payment penalties are removed. |
Already on an older plan?
Check your bill for a large conditional discount that you sometimes miss. Your retailer may now have to apply it in full, or you may be better off on a simpler plan.
Deciding whether a discount plan suits you
Compare the price after the discount
Rank plans by the estimated yearly cost with the discount applied, then without it.
Be honest about your payment record
If you have paid late in the last year, use the no-discount price.
Make paying on time automatic
Setting up direct debit or bill smoothing means you rarely miss the due date.
Ask for an extension before the due date
If you cannot pay in time, call before the due date. Some retailers will still apply the discount if an extension is agreed.
Questions about pay-on-time discounts
A percentage taken off your electricity bill if you pay the full amount by the due date. If you pay late, the discount is lost for that bill and you pay the full undiscounted price.
In Victoria the ESC set a maximum from 2020 until 30 June 2026, at 5.93% for contracts made in 2025-26. From 1 July 2026 Victorian discounts must reflect a reasonable estimate of the retailer's costs. Other states do not set a percentage cap but now limit unreasonable conditions.
Not always. Compare the yearly cost with the discount applied and without it. A plan with no conditions and a lower base price can beat a discounted plan, especially if you sometimes pay late.
You usually lose the discount on that bill. Call your retailer before the due date if you need more time. Some retailers keep the discount if you agree an extension in advance.
Yes. From 1 July 2026, under AEMC rules for NSW, Queensland, South Australia, Tasmania and the ACT, retailers must remove unreasonable conditions on discounts in existing contracts and apply the discount in full. Victoria replaced its percentage cap with a reasonable cost test on the same date.
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.