How we calculate your lazy tax estimate
Last reviewed: 30 May 2026 · Data vintage: AER ARMR 2024–25 (published 30 Nov 2025)
You're probably overpaying. Here's how we know.
Most Australian households pay more for electricity than they need to. Not because they use more — because finding a better electricity plan takes effort most people don't have time for, and retailers count on that.
The gap between what you pay and what you could pay on the best available offer is what we call the lazy tax.
A study of 47,000 real bills found the same thing everywhere.
Researchers examined 47,114 real household electricity bills and compared each one against every available market offer at the same time.
What they found:
- The typical household that hadn't changed plans in the past year was overpaying by roughly ~20% of their bill compared to the cheapest available offer.
- Even households that had recently changed plans were still overpaying by ~17%. Changing plans helped, but rarely got people to the best deal.
We use these ratios as the basis for your estimate.¹
Three inputs. One number. Here's the maths.
Your estimate comes from three things: where you live, how much electricity you use, and whether you've recently switched.
Step 1 — We work out your annual bill
We use the most accurate source available:
- You gave us your bill → we use it directly.
- You gave us your kWh → we multiply by your zone's current median market rate.
- You asked us to estimate → we look up a typical figure for your household size and dwelling type, then apply the zone rate.
How we get the zone rates and averages
Zone bill averages and per-kWh rates come from the AER's Annual Retail Market Report 2024–25,² published 30 November 2025. We use median market offer prices — what a real household can actually get in the market today — not standing offer (default) prices.
| Zone | Median market offer (Apr–Jun 2025) | Rate (c/kWh) | Avg annual use (kWh) | |---|---|---|---| | NSW — Ausgrid | $2,128 | 43.41 c | 5,204 | | NSW — Endeavour Energy | $2,407 | 43.22 c | 6,090 | | NSW — Essential Energy | $2,858 | 51.23 c | 5,852 | | SE QLD — Energex | $2,316 | 41.22 c | 6,052 | | SA — SA Power Networks | $2,418 | 57.79 c | 4,371 | | VIC — CitiPower | $1,456 | 36.80 c | 4,450 | | VIC — Jemena | $1,652 | 38.44 c | 4,434 | | VIC — Powercor | $1,833 | 39.61 c | 4,965 | | VIC — United Energy | $1,602 | 36.75 c | 4,653 | | VIC — AusNet Services | $1,965 | 43.72 c | 4,737 | | ACT — Evoenergy | $2,130 | 41.32 c | 6,325 | | TAS — TasNetworks | $2,774 | 34.53 c | 7,928 |
WA and NT figures are estimates only — these jurisdictions operate under separate regulatory frameworks not covered by the AER's ARMR.
Step 2 — We apply the overpayment ratio
We take the bill from Step 1 and multiply it by the overpayment share from the research:
- Haven't switched recently:
estimated lazy tax = annual bill × 20.07% - Switched in the past 12 months:
estimated lazy tax = annual bill × 20.07% × 83.99%
The 83.99% reflects the finding that even recent switchers typically retain about 84% of the gap — they've made progress, but rarely land on the best available deal.¹
Where 20.07% and 83.99% come from
The 20.07% is derived from the study's finding that the typical non-switcher overpays by ~$281/yr on an average Victorian bill of ~$1,400 at the time: $281 ÷ $1,400 = 20.07%.
The 83.99% is derived from the gap that persists even after switching: $236 ÷ $281 = 83.99%. The study found that even households that switched still left ~$236/yr on the table — switching only closed ~$45 of the $281 gap.
We apply these ratios to current bill figures (from the AER 2024–25 data) rather than to the 2018 Victorian average. This adjusts the estimate for both inflation and higher current prices across all states.
Step 3 — We round and show the result
The headline figure is rounded to the nearest $10. The word "Estimated" always appears alongside it — because that's what it is.
For context: how your bill compares to the government price cap (DMO 8)
The Default Market Offer (DMO) is the regulated standing offer safety net for NSW, SE QLD, and SA — the maximum a retailer can charge customers on a standing offer. It's not a good deal; it's a ceiling.
DMO 8 prices took effect 1 July 2026:³
| Zone | DMO 8 residential flat rate | |---|---| | NSW — Ausgrid | $1,899/yr | | NSW — Endeavour Energy | $2,328/yr | | NSW — Essential Energy | $2,604/yr | | SE QLD — Energex | $1,988/yr | | SA — SA Power Networks | $2,334/yr |
If your estimated bill is above your zone's DMO figure, you may be on a standing offer — which means you're almost certainly overpaying.
Victoria operates under the Victorian Default Offer (VDO), set by the Essential Services Commission.
This is a prompt, not a guarantee.
The estimate tells you roughly how much you might be leaving on the table. It is not a precise bill-by-bill calculation, a plan recommendation, or financial advice.
The underlying research used 2018 Victorian bills. Prices and market conditions have changed since then. We apply the ratios nationally as working assumptions — your actual savings will depend on your specific plan, your exact usage, and what offers are live in your zone today.
The only way to know your real number is to look at your actual bill. Which is exactly what our concierge does.
How we keep this data current
Our zone rate table carries a verified_at date. An automated check runs on every deployment and fails if the data is more than 90 days old — the calculator cannot go live with stale figures. We refresh the table each year when the AER publishes its Annual Retail Market Report, typically in November.
Ready to get a real answer?
Upload your bill and we'll review it personally — no algorithm, no auto-generated comparison. We'll tell you exactly what you could be on and how much you'd save.
Spotted an error?
If anything on this page is wrong, email methodology@neverpaymore.com.au. We take accuracy seriously.
References
¹ Victoria Energy Policy Centre (2020). Loyalty taxes in retail electricity markets: not as they seem? Mountain, B. & Burns, K. Victoria University, Melbourne. doi.org/10.26196/5E8D23D218959. Original working paper presented 2019 based on 47,114 Victorian residential electricity bills (late 2018 data).
² Australian Energy Regulator (2025). Annual Retail Market Report 2024–25, 30 November 2025. Figures sourced from Fig 2.3 (median market offer annual $, Apr–Jun 2025), Fig 2.2 (median market rate c/kWh, Jun 2025), Fig 2.19 (average annual household consumption kWh, 2024–25). aer.gov.au/publications/reports/performance/annual-retail-markets-report-2024-25
³ Australian Energy Regulator (2026). Final Determination — Default Market Offer 2026–27, 26 May 2026. aer.gov.au/news/articles/news-releases/aer-releases-final-default-market-offer-2026-27