Yes, automatic renewals are legal in Australia. But the renewal must be clearly disclosed before sign-up, not hidden, and your terms can't be unfair, for example by letting only you decide renewal or price. From 1 July 2027, auto-renewing contracts and free trials are subscription contracts under the ACL, with disclosure, notice and easy-cancellation duties.
Key takeaways
- Automatic renewal is legal in Australia when it's clearly disclosed and the terms are fair.
- From 1 July 2027, fixed-term contracts that roll over, free trials and intro discounts are all 'subscription contracts' under the ACL.
- Renewal information must be disclosed at sign-up, and notices must be sent at times the regulations will set.
- Contracts made before July 2027 come under the new rules when they renew after that date.
- A good renewal reminder is a marketing email: show customers what they got this year.
One of the best salespeople I ever worked with had a name for annual renewals.
He called it "poking the bear."
Here's what he meant. With an annual plan, once a year you effectively ask every customer: do you want to keep paying us? If the bear is happy and asleep, why would you poke it?
I wrote about this in The Subscription Playbook when comparing annual and monthly billing. Annual billing creates more certainty and better cash flow. But it comes with a big renewal event every 12 months.
Automatic renewal is how most subscription businesses avoid poking the bear. The customer stays unless they choose to leave.
Is that legal in Australia? Yes. But from 1 July 2027, the bear gets a wake-up call whether you like it or not. This guide explains the rules as at October 2026. It's general information, not legal advice.
Are automatic renewals legal in Australia?
Yes. There's no ban on automatic renewal in Australia, and nothing in the 2026 reforms introduces one.
What the law cares about is how you do it:
- Is the renewal clearly disclosed before the customer signs up? If not, you risk misleading conduct.
- Are the renewal terms fair? In a standard form contract with a consumer or small business, terms that let only one party decide on renewal, or vary the price one-sidedly, can be unfair.
- Can the customer stop it easily? From July 2027, that becomes a specific legal duty.
The ACCC has been here before. In 2017 it took serviced-office provider Servcorp to court, alleging that terms in its standard agreement allowed automatic renewal followed by price increases without prior notice, along with other one-sided clauses. That case was about small business customers, which is a reminder that auto-renewal risk isn't only a consumer issue.
What changes for automatic renewals on 1 July 2027?
The Unfair Trading Practices Act 2026 defines four kinds of "subscription contract." Three of them are about automatic renewal or conversion:
| Type (s 48B) | Example | What triggers the rules |
|---|---|---|
| Fixed period that continues unless stopped | 12-month software plan that renews automatically | Supply continues after the fixed period unless someone stops it |
| Initial free period | 14-day free trial that becomes paid | The customer automatically becomes liable to pay after the trial |
| Initial discount period | First three months at A$1, then A$29 | The customer automatically pays a higher rate after the intro period |
| Indefinite period | Monthly membership with no end date | Recurring supply and automatic payment until canceled |
For all of them, from 1 July 2027:
- At sign-up (s 48D): you must state it's a subscription contract and disclose information about what the customer will pay, the contract period, renewal, extension or other continuation, any notice needed to end it, and how to end it.
- During the subscription (s 48E): you must send the information the regulations prescribe, at the times they prescribe.
- When they want out (s 48F): cancellation must be easy to find, straightforward and online if they joined online.
When will renewal reminders be required?
The honest answer is that we don't know the exact timing yet.
The Act leaves the content and timing of notices to regulations. The Parliamentary Library's Bills Digest gives examples of when notices may be required, including when a subscription will be renewed and before a free trial expires. As at October 2026, I couldn't find published regulations.
The February 2026 exposure draft gave a strong hint. According to law firm summaries, it proposed notices a reasonable time before the last chance to cancel or the end of a fixed term, every six months for indefinite subscriptions, and before the last date to cancel a free trial or promotion without being charged. That detail was moved out of the final Act and into regulations, so it could change.
Here's the reminder schedule I'd build now, with timing as an editable setting:
| Plan type | Reminder | What it should say |
|---|---|---|
| Annual plan | About 30 days before renewal, then about 7 days before | Renewal date, price, what's included, how to change or cancel |
| Free trial | A few days before conversion | Date it converts, the full price that will be charged, how to cancel |
| Intro discount | Before the price steps up | Old price, new price, date, how to cancel |
| Monthly, no end date | Periodically (the draft proposed every six months) | Current price, billing date, how to cancel |
| Any plan with a price change | Before the new price applies | Old and new price, every available option, how to cancel |
Ready-to-use wording is in the renewal reminder email templates and free trial reminder templates.
Do the new rules apply to customers who signed up before July 2027?
Eventually, yes.
The application provision says the key subscription rules apply to contracts entered into on or after 1 July 2027. But a contract made earlier comes under them from the day it is renewed, extended or otherwise continued, or varied, on or after that date.
For an annual plan, that means the first renewal after 1 July 2027 brings the customer into the new regime. If you have a big renewal cohort in July or August 2027, your reminder system needs to be compliant before then, not after.
Get your renewals working for your cash flow
Ask a BPAG adviser to review your annual pricing, renewal timing, GST on prepayments and cash flow, and to flag which renewal terms a lawyer should check.
How do you turn a renewal reminder into a reason to stay?
Most businesses dread the reminder email. I think that's the wrong way to look at it.
The UK is heading the same way: its new subscription rules add renewal reminders and a cooling-off period after renewal, and our UK subscription rules case study explains why businesses there are treating every renewal like a fresh sale.
So treat it like one. A great renewal reminder doesn't just say "you'll be charged A$490 on 1 August." It reminds the customer why they signed up.
Steal this: the 'your year with us' renewal email
Subject: "Your plan renews on 1 August: here's your year in numbers"
- What they used: "You booked 11 sessions" / "You sent 4,200 invoices" / "You saved A$212 on delivery."
- What's new: the two or three features you added this year.
- The renewal: date, price (including GST), and what's included.
- The options: switch to monthly, change plan, or cancel, each with a link.
If you can't fill in the first bullet with something impressive, that's useful information too.
What does an honest renewal cost you?
Let's put numbers on it. This is illustrative.
400 annual customers at A$490
You have 400 customers on an annual plan at A$490 (including GST). Historically, with no reminder, 85% renew automatically: 340 customers, or A$166,600.
You add clear reminders and an easy online cancel. Renewals drop to 80%: 320 customers, or A$156,800. That's A$9,800 less in cash at renewal time.
But some of those 20 extra leavers were going to dispute the charge, ask for refunds, or leave angry reviews anyway. And the 320 who stay chose to, which makes them better candidates for upgrades next year.
The bigger lever is often the annual discount itself. If your discount is too generous, you're giving away margin to customers who would have stayed monthly anyway. The calculator below helps you find a discount that still beats your monthly churn.
Annual Discount CalculatorFind the annual discount that still beats monthly churn.Open the free tool →What about "annual, paid monthly" plans?
These are minimum commitment plans, and they're legitimate. I recommend them in the book as one of the eight subscription models. But they're where auto-renewal and exit fees collide.
In the US, Adobe agreed in March 2026 to a US$150 million settlement after the government alleged it hid the early termination fee on its "annual, paid monthly" plan. The lesson travels well: if a plan is a 12-month commitment, say "12-month commitment" in the headline, show the exit cost before purchase, and remind customers before it renews into another year. More on designing these in the minimum commitment model.
When is auto-renewal the wrong choice?
When customers buy for a one-off need. A wedding planning tool, a tax return package or a moving checklist app rarely needs to renew automatically. Auto-renewing them mostly collects money from people who've moved on, and that's the subscription trap pattern the new law targets. Offer a renewal option instead.
What to do next
- List every plan that renews, converts or steps up in price automatically.
- Put the renewal terms next to the sign-up button, not behind a link.
- Set up reminders for trials, annual renewals and price changes, with adjustable timing.
- Rewrite your renewal email as a "year in review."
- Check your terms for one-sided renewal or price clauses. See unfair contract terms and raising subscription prices in Australia.
- Make sure customers can cancel as easily as they joined. See cancellation rules.
Then look at the money. Annual plans bring cash in early, and renewal season can swing your cash flow by tens of thousands of dollars. Plan for it.
Free Subscription Profit Review
Australian business owners can book a free 30-minute review with a BPAG Accountants adviser. An honest conversation about:
- whether a subscription model could work for your business
- how recurring revenue could cover your fixed costs each month
- how it could lift what your business is worth
No cost, no obligation. General information only until we understand your situation.
Frequently asked questions
Can I auto-renew a customer onto a higher price?
Only with care. If your terms allow a price change at renewal, give clear notice before the renewal date, explain the new price, and tell customers about every option, including any cheaper plan. The ACCC's case against Microsoft alleges subscribers were auto-renewed at a higher price without being told about a cheaper Classic plan. A renewal price rise with no fair exit risks being unfair.
Do I need a customer's consent again before an annual renewal?
Australian law doesn't require fresh opt-in consent before each renewal. The 2027 reforms rely on disclosure at sign-up, prescribed notices during the subscription and an easy exit, rather than a new opt-in. Some businesses still ask customers to confirm, especially for big B2B renewals, because it reduces disputes. Check any sector-specific rules for your industry.
Can a customer get a refund after an annual plan auto-renews?
It depends on your terms, what you disclosed and whether you sent proper notice. If the renewal was clearly disclosed and reminded, you're generally not required to refund a change of mind, though many businesses offer a short grace period. If the renewal wasn't disclosed, or a consumer guarantee was breached, the customer may have stronger rights.
Are auto-renewal clauses in B2B contracts covered?
Yes, for small businesses. Unfair contract term protection covers standard form contracts with businesses that have fewer than 100 employees or turnover under A$10 million, and business.gov.au lists terms that let only one party decide on renewal as an example of a possibly unfair term. From July 2027, small business subscribers also get the new notice and cancellation protections.
How long before renewal should I send a reminder?
As at October 2026 the regulations setting the timing weren't published. For annual plans, many businesses send one reminder about 30 days before renewal and another about a week before. For free trials, a reminder a few days before the trial converts, stating the price, is common practice. Build timing as a setting you can change.
General information only, current as at October 2026. It isn't legal, tax or financial advice and doesn't consider your circumstances. Speak to a qualified adviser before acting.
Talk it through with a BPAG adviser
Free for Australian business owners: a 30-minute Subscription Profit Review on whether a subscription suits your business.
Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (No. 64, 2026), ss 48B, 48D, 48E and application provision s 312
- Parliamentary Library, Bills Digest No. 58, 2025–26
- business.gov.au, Australian Consumer Law and your business (unfair contract terms examples)
- ACCC media release, ACCC takes action against Servcorp for alleged unfair contract terms (15 Sep 2017)
- ACCC media release, Microsoft in court for allegedly misleading millions of Australians over Microsoft 365 subscriptions (27 Oct 2025)
- King & Wood Mallesons, Unfair trading practices arriving mid-2027 (10 Feb 2026), summary of exposure draft reminder timing
- The Subscription Playbook, Robert Coorey (2022), Chapter 3
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.