How to Calculate Your Electricity Bill
A plain-English, step-by-step guide to working out your electric bill by hand — the formula, reading your meter, adding charges and tax, and a full worked example.
The electricity bill formula
Every electricity bill comes down to one formula. Once you know it, you can check your statement or estimate a bill before it arrives:
Bill = (kWh used × rate per kWh) + fixed charge + tax
Calculate your electricity bill step by step
- 1
Find your usage in kilowatt-hours (kWh)
Your electricity meter measures energy in kWh. Read it at the start and end of the billing period and subtract the two numbers, or take the "kWh used" figure straight off your latest statement. This is the single number that drives most of your bill.
- 2
Find your rate per kWh
Your rate (also called the unit price or tariff) is printed on your bill, usually as a value like $0.17 per kWh. If you are on a tiered or time-of-use plan you may have more than one rate — note each one and the usage it applies to.
- 3
Multiply usage by rate
The core formula is: energy cost = kWh used × rate per kWh. For example, 600 kWh × $0.17 = $102. This gives you the usage portion of the bill before any fixed charges or taxes.
- 4
Add the fixed (supply) charge
Most utilities add a fixed daily or monthly supply/standing charge that you pay regardless of usage. Add this on top — for example, a $10 monthly service charge brings $102 up to $112.
- 5
Add taxes and fees
Finally, apply any sales tax, environmental levy, or regulatory fee. A 5% tax on $112 adds $5.60, for a total bill of $117.60. Now you have the full amount your utility will charge.
Worked example
Say a household used 600 kWh in a month on a plan that charges $0.17 per kWh, with a $10 monthly supply charge and 5% tax:
- Energy: 600 kWh × $0.17$102.00
- Fixed supply charge$10.00
- Tax (5% of $112)$5.60
- Total bill$117.60
Frequently asked questions
Multiply your usage in kilowatt-hours (kWh) by your rate per kWh, then add the fixed supply charge and any taxes. In short: bill = (kWh × rate) + fixed charge + tax. For example, 600 kWh at $0.17/kWh is $102, plus a $10 supply charge and 5% tax gives a total of about $117.60.
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