Splitting Bills in a Share House: Rent, Power and Internet

You've found the room, the bond's paid and the lease is signed. Somewhere in the next three months a power bill will arrive in one person's name, and the house will find out how it's splitting things.

Agreeing the split before that bill arrives is much easier than sorting it out after. It takes one conversation and a short note everyone can find later, and it covers three things: what's shared, how each part is divided and how the money moves.

Agree the split before the first bill

List the shared costs: rent, power, gas if connected, internet and any water charges you legally owe. Some houses share basics like cleaning products and toilet paper too. If you want cover for your belongings, our guide to contents insurance for renters explains what to check when you share a home.

For each one, agree:

• How it's divided. Usage bills such as power and internet are usually split equally between the people living there. Rent is often split by room, because rooms differ.
• Whose name it's in. Check who is named on each account and responsible for paying it.
• How and when you pay. For example, everyone transfers their share to the account holder within a few days of the bill arriving.

Write it down in a message or a shared note. It doesn't need to be formal: it's there so that in six months nobody has to remember what was agreed.

Splitting the rent when rooms differ

Equal shares work when the rooms are much the same. When one room is bigger, has its own bathroom or comes with the parking space, the person in it usually pays more.

A simple way to get there is to start from an equal share and agree how much more the better room is worth. Ana, Ben and Kim, who are made up, rent a house for $750 a week. An equal share would be $250 each. Ana's room is bigger and has its own bathroom, so they agree it's worth $50 a week more, and Kim's small room pays $50 less.

There's no official formula, so what matters is that everyone agrees before signing. If you're taking over someone's room, ask what it pays and why before you move in, and ask about their share of the bond too. Our guide to rental bonds explains how a bond changes hands.

When someone moves in or out partway

Bills don't line up with move-in days. A power bill covers about three months, and housemates come and go in the middle of one.

The fair way to split it is by days: each person pays for the days they lived there. Jo, who had Kim's room before her, moved out partway through a 90-day power bill of $450, and Kim moved in the next day. Three people for 90 days is 270 days of living there in total, so each person pays about $1.67 a day.

Jo leaves before the bill arrives, so it helps to take a meter reading on her last day and agree how she'll pay her share once it does. That's easier than finding her three months later.

Whose name is on the bill

Whoever opens an energy account takes responsibility for paying all of it, even in a share house. If the account is in more than one name, each person can be held responsible for the whole amount. That's why it matters who holds which account, and why it helps not to put every account with the most organised person in the house.

Rent works the same way. If everyone's name is on the lease, each of you can be asked to pay rent a housemate hasn't paid. In Victoria, Consumer Affairs Victoria says you can all end up behind on the rent even if you've paid your own share.

Spreading the accounts helps: one person holds power, another the internet, and a third pays the rent. If this is your first move, our guide to moving out of home covers the other costs that arrive with these bills.

Set aside your share on payday

A $450 power bill is easier to pay as small amounts from each pay than all at once. For a full quarter, Kim's share would be $150, about $23 a fortnight. The yearly bill converter turns any bill into an amount per pay, and our guide to monthly bills on fortnightly pay shows how to fit them around your paydays.

Clova shows your bills before payday, so a house bill due next week is already counted in what's left to spend.

When a housemate doesn't pay

A private message can ask what happened: name the amount, the bill and its due date. If they need more time, agree a date and write it down.

If it keeps happening, the agreement you wrote at the start is what you'll both go back to. In NSW and Victoria, disputes between co-tenants generally can't go to the tenancy tribunal. In NSW, ask LawAccess NSW about your options; ordinary housemate disputes no longer qualify for Community Justice Centre mediation. In Victoria, the Dispute Settlement Centre of Victoria may help. If the person struggling to pay a bill is you, tell your housemates early, and look at free financial counselling before it builds up.

An agreed split and an amount reserved each payday give everyone something clear to work from.

A note from us

Living with other people means sharing money as well as a kitchen, and that part rarely comes with instructions. We are building Clova to help you plan your share of house bills before payday.