Business energy broker commission: how brokers get paid

Most business energy brokers are paid commission by the supplier, and that cost is built into the unit rate and sometimes the standing charge you pay. Where the cost is paid through your supplier, it has had to be shown in your contract's Principal Terms for microbusinesses since 1 October 2022 and for all non-domestic contracts signed from 1 October 2024, so you can see what your broker earns before you sign.

Two ways brokers are paid

Ofgem describes them as:

• Indirect: the supplier pays the broker, and the cost is added to your bill through the rates.
• Direct: you pay the broker a fee, such as a flat sum or a charge per deal.

Some brokers combine both. If you pay a broker directly, that fee does not have to be listed in the supplier's Principal Terms, so get it in writing from the broker. Supplier in-house sales staff are not required to disclose their own commission. Ofgem's research found many customers do not realise quoted prices include broker commission.

How commission turns into your rate

In many deals, the broker can choose how much "uplift" to add to the supplier's base price: a number of pence per kWh, sometimes plus a daily amount. How and when the supplier passes that money to the broker (for example, as you use energy or partly in advance) is agreed between them and varies; we have not been able to verify a typical arrangement, so ask your broker. Ofgem explains commissions are based on estimated usage, but you pay for what you actually consume, so estimates should be as accurate as possible.

Worked example: the uplift over a contract

This is a hypothetical, not a typical figure. A café uses 40,000 kWh a year on a three-year fixed deal. The broker's uplift is 1.0p per kWh.

• Uplift per year: 40,000 x £0.01 = £400
• Over three years: £400 x 3 = £1,200

Under the rules this £1,200 (or the estimate) should be stated as a total in pounds and pence in your Principal Terms. If a broker says the deal is "free" but the rate looks high, ask for the number. We have not been able to verify typical uplifts across the market, so treat any claim of an "average" with caution.

What must be disclosed

1. Principal Terms. For microbusinesses, broker costs have to be shown from 1 October 2022. From 1 October 2024 this applies to all non-domestic contracts. They should be stated as a total for the whole term, not hidden in small print.
2. On request. You can ask for information on past cost too.
3. Not undue prominence. The cost should be shown without being buried or inflated.

Read contract terms to check to find the Principal Terms in a real contract.

How to ask your broker

• "How are you being paid on this deal, directly, indirectly or both?"
• "What is the total in pounds for the whole term?"
• "What is the base supplier price before your uplift?"
• "Is the cost the same if I choose a shorter or longer term?"
• "What happens to the commission if I leave early or my usage changes?"

Ask for two quotes with different uplifts. If the broker can adjust the uplift, you can see how much of your rate is broker margin.

Find out what your current broker earns

Look at your contract's Principal Terms, or ask your supplier or broker. Our page how can I find out what my broker is paid goes through this step by step. See also how much commission brokers take.

Is commission always bad?

Not necessarily. A broker can save you time, negotiate terms or manage renewals. The point is to see the cost, then judge the service. Comparison sites are also paid commission by suppliers; see broker vs direct vs comparison site.

Commission refund scams

Ofgem warns that scammers claim it has forced brokers to repay undisclosed commissions. It has not, because it does not regulate brokers and cannot require repayment. You may be able to pursue past undisclosed commissions through litigation, so take independent legal advice first, and be cautious of firms demanding upfront fees. If you believe a broker mis-sold you, see broker mis-selling.

What is changing

Brokers are not directly regulated by Ofgem yet. Ofgem said in July 2026 that it is preparing to regulate brokers, with initial proposals in 2027. Until then, rely on the disclosure rules and dispute schemes; see are energy brokers regulated?.

Points to remember

Commission itself is not illegal and a broker earning it is not a sign of wrongdoing. The problem is when you do not know about it. Check three things on any quote: the broker cost as a total, the rate before that cost, and whether you are paying a separate direct fee on top. Ofgem advises that if you use more energy than the figure used to calculate commission, you pay for what you actually use, so tell the broker honestly about your expected consumption, and update it if your business grows or shrinks. If a contract was agreed before the disclosure rules applied to your size of business, you can still ask for the information, and keep a written note of the answer for any later complaint.

A short example of reading a quote

Suppose two quotes arrive for the same site. The first shows a 26.0p/kWh rate and a broker cost of £1,080 for a three-year term. The second shows 25.5p/kWh but states the broker cost only as "included". Over 36,000 kWh a year for three years that is 108,000 kWh, so the 0.5p gap is 108,000 x £0.005 = £540. The second looks cheaper by £540, but you cannot tell whether its hidden cost is bigger or smaller than £1,080. Ask for the number, then compare like for like: the base price, the broker cost and any standing charge. If the second broker cannot give a figure, the first quote may be the more transparent choice even though the headline rate is higher. Both figures are made up for illustration; use the numbers in your own Principal Terms.

Next steps

1. Find the broker cost line in your contract's Principal Terms.
2. If you cannot find it, ask in writing.
3. Use it to compare offers; see how to choose a broker.