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How prepaid electricity pricing works

Understanding blocks, fixed charges and VAT — and why the same R500 buys different amounts depending on when in the month you spend it.

1. Inclining block tariffs

Most South African municipalities use an inclining block tariff, or IBT. Instead of one flat price per kilowatt-hour, your usage is divided into bands. The first band is cheapest; each subsequent band costs more.

Critically, the bands track your cumulative purchases within a calendar month, and reset to zero on the 1st. Your position in the ladder is not about how much you buy in one go — it is about how much you have already bought since the month began.

Worked example — City of Tshwane

Tshwane's residential prepaid tariff has four blocks. Suppose you have already bought 340 kWh this month and you buy more electricity today. Your first units today are still priced in the second block, and once you cross 400 kWh cumulative, the remainder switches to the third block rate. A single purchase can therefore span two or three different prices.

2. Fixed monthly service and capacity charges

Several metros levy a fixed charge each month on prepaid meters. It is deducted from your first purchase of the calendar month, before any units are credited.

SupplierFixed monthly charge (incl. VAT)
City Power (Johannesburg)R241.50
City of TshwaneR163.88
City of Ekurhuleni (Tariff B)R137.62
City of Cape Town (Domestic)R74.77
eThekwini (Durban)None
Eskom Direct (Homelight)None

Why a R200 top-up in Johannesburg can give you zero units

City Power's fixed charge is R241.50 including VAT. If that is your first purchase of the month, the entire R200 goes towards the charge and you receive no electricity at all. You would need roughly R42 more before a single unit loads.

If you have already made a purchase earlier in the month, the charge is settled and the full R200 goes towards units. This is why the calculator asks what you have already bought this month — without that, the answer would be badly wrong.

3. VAT

Electricity carries 15% VAT. Some municipalities publish tariff schedules excluding VAT and others including it, which makes direct comparison misleading if you are reading raw schedules. City Power and Ekurhuleni both publish excluding VAT, so their headline numbers look lower than what you actually pay.

Every figure on this site is VAT-inclusive — what actually leaves your prepaid balance.

4. Municipal supply versus Eskom Direct

About half of South Africa's electricity customers buy from Eskom directly. The rest are served by roughly 180 licensed municipal distributors. Supply is often split within a single town — the centre on municipal reticulation, outlying areas on Eskom.

Eskom's Homelight tariffs are now a single flat rate with no blocks and no fixed monthly charge. If you are on Homelight, the timing of your purchase makes no difference at all.

5. When tariffs change

Eskom's tariffs change on 1 April each year. Municipal tariffs change on 1 July, following NERSA approval. Rates on this site are checked against the official schedules, and each result shows the verification date with a link to the source document.

6. Things this calculator does not model

For an exact figure, your prepaid receipt is always the authoritative source. Dividing the rand amount by the units received gives your true effective rate.