Should You Charge for Tutoring by the Term, Upfront?

By Brandon Collis 22 October 2026 10 min read

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Should You Charge for Tutoring by the Term, Upfront?

If you want to charge tutoring by the term, my advice after running EquateIt is simple: once a family is committed, bill the whole term upfront and keep per-session billing for trials. Here is why, what it costs you, and what the law says about the refund exposure it creates.

This is general operational guidance, not legal, tax or accounting advice. ClassQuill is a software company, not an adviser. Have an accountant confirm how money received in advance is treated for GST and income tax, and a solicitor confirm your refund terms.

Should a tutoring business charge by the term upfront, per session or monthly?

Once a family is committed, charge by the term upfront. Keep per-session billing for trials and new enquiries, where the lowest-commitment yes matters most. You check who has paid once per term instead of every week, you get the revenue before the work, and a family that has paid for the term is not deciding each week whether to cancel. The cost is that you now hold money for sessions not yet delivered, so you need a clear refund rule, and some families will find a lump sum a barrier. The decision is really three smaller ones: how often you bill, whether you discount, and what happens to unused sessions when a family leaves.

Model	Cash flow	Cancellation behaviour	Refund exposure	Sign-up friction
Per session, billed after	Slowest, you carry the risk	Easiest to cancel each week	None	Lowest
Monthly in arrears or advance	Steady	Moderate	Small	Low
Term, two instalments	Good	Stronger commitment	Moderate	Moderate
Term, paid in full upfront	Best	Strongest commitment	Largest	Highest
Block of N sessions prepaid	Good	Strong, tied to sessions not dates	Moderate	Moderate

This is a judgement table, not measured data. We do not track a before-and-after number for any of these model changes at EquateIt, and I have not seen a credible published one.

What does charging by the term actually change?

Three things, in order of how much they matter.

Cash arrives before the work. For a company paying tutors weekly, that is the difference between funding payroll from last month’s receipts and funding it from this term’s. It also ends the weekly invoice-chasing cycle for families who pay on time. Our payments and invoicing guide covers what that chasing costs.

The cancel-this-week decision disappears. With an invoice per session, every week offers a fresh chance to cancel. Most EquateIt families are on prepaid packages, and as I described in the pricing guide, they take sessions more seriously and are less likely to shuffle times. That matters for the student as much as for revenue, because a session that keeps moving breaks the thread of what the tutor is working on.

Prepayment makes your cancellation policy easier to keep. At EquateIt, families give five days’ notice to reschedule. With less notice the session is counted and can’t be moved, and I never waive that charge. No family has ever disputed that rule. I set the rules out from the very beginning, so nobody meets them for the first time at the moment they want to cancel. The service agreement guide covers the wording, and why tutoring clients really cancel covers what sits behind most cancellations.

Does paying by the term save you time and fees?

Yes, on both. Taking payment through a card platform is the easy path. The other path is a direct bank transfer, whose catch is the time spent checking who has paid. Billing per term makes bank transfer workable: you check once per term rather than once per session or invoice.

Fees point the same way, because card fees have a fixed part per transaction. I won’t share EquateIt’s actual payment figures, so here is an illustration using Stripe’s published Australian rates (card 1.65% + A$0.30, BECS direct debit 1% + A$0.30 capped at A$3.50; Stripe pricing, checked 5 October 2026, so confirm current pricing). These are not EquateIt’s numbers. Assume a business with $1M of revenue a year.

Method and payment size	Payments a year	Fee per payment	Total fees	Effective rate
Card, $60 per session	16,667	$1.29 (1.65% + $0.30)	$21,500	2.15%
Card, $600 per 10-session block	1,667	$10.20 (1.65% + $0.30)	$17,000	1.70%
BECS direct debit, $60 per session	16,667	$0.90 (1% + $0.30)	$15,000	1.50%
BECS direct debit, $600 per block	1,667	$3.50 (1% + $0.30 is $6.30, capped at $3.50)	$5,833	0.58%

On cards the saving is $4,500 a year, and all of it comes from the fixed 30 cents being charged 15,000 fewer times. The percentage part costs the same either way. Billing a whole term as one payment has the same effect. Australia now bans card surcharges, so you absorb that cost rather than passing it to families (see card surcharges for tutoring businesses). With Stripe’s cap, direct debit on a term-sized invoice can cost under 1%: a $480 term invoice costs $3.50, or 0.73%, and an $800 invoice costs $3.50, or 0.44%. Separately, a quote we received came in around 1.3% for direct debit, which is one data point, not a rate to plan around. For the full fee breakdown, see what Stripe charges a tutoring business.

Direct debit also has failure costs and dispute exposure that bank transfer does not, which is why I prefer a family-initiated bank transfer for a whole term. The direct debit guide on this blog compares the trade-offs.

What are the downsides nobody mentions?

You hold a liability, not income. Money received for sessions you have not delivered is owed back if you cannot deliver. Treat the term balance as something the family could ask for, not as profit. Ask your accountant how it is treated for GST and income tax.

Refund exposure is real. A family who leaves in week three of ten has seven weeks of unused sessions. If your terms say nothing, you are guessing. My rule is that a family who agreed to the continuing sessions and leaves mid-term is not refunded. That only works if it is clear and agreed before they pay, and it does not override what consumer law gives families (next section).

It raises the bar to say yes. A lump sum is a bigger decision than a weekly invoice, particularly for families who budget weekly. The next section covers what I do about that.

It makes mid-term tutor changes more visible. If a tutor leaves in week four, a prepaid family notices immediately. Have a plan, because the family has paid for continuity.

What do families say when you ask for the term upfront?

Some push back. Here is what I suggest:

Ask yourself why. The objection tells you what you are solving: cash flow, trust, or something else.
Offer smaller blocks. Four sessions at a time instead of a whole term.
Use direct debit. The family authorises once, and you collect without chasing. Weigh the failure risk first.
Agree a 10-session bundle and take payment after each session. The family commits to the ten sessions, and pays as they go.

Each option trades some cash-flow benefit for a yes. A family on a smaller block is still better than a family who walks.

How should you design the discount?

At EquateIt I give 10% off for paying a term upfront. I would keep the headline hourly rate where it is and discount the term total, so the rate on your pricing page doesn’t drop. That is the approach in the pricing pillar.

An illustration with round numbers, not EquateIt’s rates: ten weekly sessions at $80 an hour is $800 billed per session. At 10% off the term is $720, an $80 difference. The discount buys you the cash ten weeks early and a family that has already committed. Whether that trade works depends on your margin, so run your own numbers.

What should your refund rule say, and what does the law set as the floor?

Decide these five things and write them into the agreement the family signs before paying.

When the term starts and ends, and what counts as a delivered session.
What happens if the family leaves mid-term. Mine is no refund once they have agreed to the continuing sessions.
What happens if you cannot deliver: tutor illness, tutor leaves, a replacement offered or a refund.
Make-up rules: what happens to a session cancelled with notice (rescheduled, credited, or expires at term end).
A deadline for claiming a refund, if you set one.

A no-refund term is allowed only inside the floor the law sets, and the floor differs by country.

Australia. NSW Fair Trading says a customer can’t cancel a service just because they changed their mind, but consumer guarantees still apply: due care and skill, fit for purpose, delivered in a reasonable time. If you fail to deliver, a remedy is owed. Separately, the unfair contract terms rules in the Australian Consumer Law can void a one-sided standard-form term. A “no refund, ever” clause the family only meets after paying is the risky kind. Check the ACCC’s unfair contract terms guidance for current penalties.
UK. The CMA’s guidance on unfair contract terms (updated 22 July 2026) covers fairness, transparency, and fees and penalties. For services sold at a distance, the Consumer Contracts Regulations 2013 give a cancellation period that begins when the contract is made, and a consumer who asked for services to start early pays only proportionately for what was supplied.
US. The FTC’s Cooling-Off Rule doesn’t cover sales made entirely online, by phone or by mail, or completed at the seller’s permanent place of business, so state law and your written terms decide it.

Whichever country you are in, a no-refund term needs to be clear and agreed upfront, and a solicitor should read it. Our companion guide on cancellation and refund law goes through all three countries.

How do I bill a term in ClassQuill?

I won’t pretend it does more than it does. ClassQuill has no term-package or prepaid-balance feature. Its invoices come from sessions delivered: created manually, drafted automatically when a session completes, or generated per classroom billing period (weekly, fortnightly or monthly). Families pay by PayID or bank transfer with a reference code, or you mark an invoice paid when money arrives another way. ClassQuill does not charge cards automatically today and has no direct debit or PayTo. A term paid upfront is something you arrange with your families directly.

Quick-start checklist

[ ] Default to the term upfront by bank transfer: one payment check per term, cash upfront, fewer fixed card fees
[ ] Keep per-session billing for trials and new enquiries
[ ] Discount the term total (I use 10%), not the headline hourly rate
[ ] Write the notice rule and the mid-term refund rule into the agreement before the family pays
[ ] Have a plan for pushback: smaller blocks, direct debit, or a 10-session bundle paid per session
[ ] Treat money received in advance as owed until delivered
[ ] Ask your accountant how advance payments are treated
[ ] Have a solicitor read any no-refund term

The best term-billing system is the one where the family knew every rule before they paid.