Like most websites OVO Energy uses cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on this site. Accept and Close

How do you calculate my online management discount?

We add your £30 online discount to your account, bit by bit, every day. But the way we calculate it is a little more complicated than you might think.

Our online management discount saves you £30 a year on each fuel. You’d think the calculation to work out your daily credit would be as simple as dividing £30 by 365 (for each day of the year). But it’s not quite that simple. 

Let’s explain…

So, you save £30 for each fuel, every year. Part of that is paid into your OVO account every day as credit – and part of it comes from the saving you make by not paying VAT on that credit. 

Your daily credit amount is £0.078278. That adds up to £28.57147 over a year. It’s nearly £30, but not quite. So how is the extra amount calculated?

Well, every energy bill is subject to 5% VAT. But as we add your credit every day before we add the VAT to your bill, you don’t have to pay it on that portion.

Now, 5% of your daily credit amount (£0.078278) is a saving of £0.0039139, which adds up to £1.4285745 over a year.

So your annual credit of £28.57147 plus your VAT saving of £1.4285745 adds up to £30 – your online management discount for each fuel.

How the online discount shows on your statement

Take a look at this example of a customer’s statement:

Online discount OVO Energy

You only need to look at two of the figures to see how we calculated the credit amount:

  • The number of days in the billing period.
  • The online discount shown.

On this statement, the number of days in the billing period is 31 (from 01/03 to 31/03) and the online discount (shown as ‘Your online discount’) is £4.86. We worked out £4.86 by multiplying the daily credit amount of £0.078278 by 31. This gives us £2.426618

Now for the 5% VAT saving... although you won’t see it on your statement, 5% of that credit amount is a saving of £0.1213309. So, in total, the credit and the 5% VAT saving add up to £2.5479489.

Finally, as this customer gets both their electricity and gas from us, we double £2.5479489 to make £5.0958978. We then round that number up to two decimal points, which gives this customer a total saving of £5.10.

Ready to switch?

Simply enter your postcode and see how much you can save