If you have ever wondered why a broker's service is free to you as the business, the answer is simple: brokers are paid by the supplier, not by you, as a fee built into the rate you're quoted. That is standard across the industry — the part worth understanding is how it affects the number on your bill.
Key takeaways
- Brokers are paid commission by the supplier when you take out a contract — never a separate invoice from the broker to you.
- Commission is typically built into your unit rate, added as a small amount per kWh or per unit over the contract term.
- From October 2024, Ofgem requires commission to be shown in the principal terms of new non-domestic energy contracts.
- A broker comparing more of the market, not just one or two suppliers, is more likely to find you a genuinely competitive rate.
- It is reasonable to ask any broker directly how they are paid and by whom — a broker confident in their process will tell you.
Where the commission actually comes from
When you sign a contract through a broker, the supplier pays the broker a commission — usually a small amount added to your unit rate (per kWh for energy, or a percentage for other services) and spread across the length of your contract. You do not receive a separate bill from the broker for this. It is baked into the price you already see.
What changed in October 2024
Ofgem commission disclosure rules
For non-domestic energy contracts signed from 1 October 2024, Ofgem requires that broker commission is clearly shown in the contract's principal terms. This was introduced to address a lack of transparency in how business energy brokers are paid across the industry.
Does using a broker cost more than going direct?
Not necessarily. Suppliers often offer brokers rates that are not available directly to the public, because brokers bring them volume across many businesses. A broker comparing a wide panel of suppliers is frequently able to find a lower total cost than a business would get by approaching one or two suppliers itself — even after commission is accounted for. The exception is a broker with a narrow panel or an incentive to push one particular supplier, which is why panel breadth is worth asking about.
Questions worth asking a broker before you use one
- 1How many suppliers do you compare, and is your panel limited to a handful?
- 2How are you paid, and by whom — the supplier, or me?
- 3Will you tell me what you earn on my contract if I ask?
- 4Do you have a relationship with one supplier that could bias your recommendation?
- 5What happens at my next renewal — do you proactively flag it, or do I need to remember?
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Compare the market, freeFrequently asked questions
Do I pay a broker directly for their service?+
No. Business utility brokers are paid commission by the supplier once you take out a contract, not by an invoice from the broker to you. The service is free to the business at the point of use.
Does broker commission make my rate more expensive?+
Commission is built into the rate you are quoted, but suppliers frequently offer brokers rates not available directly to the public because of the volume they bring. Comparing several options, broker or direct, is the only reliable way to know if a specific rate is competitive.
Can I ask a broker how much commission they earn on my contract?+
Yes, and it is a reasonable question to ask any broker before you commit. For energy contracts signed from October 2024, Ofgem requires commission to be disclosed in the contract's principal terms in any case.
Are all business utility brokers regulated?+
Energy and water brokers largely operate under Ofgem and Ofwat rules around conduct and disclosure. Insurance brokers are regulated by the FCA. Rules and requirements vary by the type of service, so it is worth checking what applies to the specific product you are comparing.
About this guide
The mybusinessdeals energy team benchmarks UK business gas and electricity contracts against the whole market.