A tutoring subscription bills a fixed monthly or term fee for a set number of sessions, such as four one-to-one lessons a month, often with practice resources and progress reports. Course businesses sell all-access libraries instead of one-off courses. Udemy lifted subscriptions to 72% of revenue in 2025. Price on tutor time and group size, and sell accountability and results, not answers AI gives away free.
Key takeaways
- Udemy's subscription revenue rose to 72% of total revenue in 2025 as consumer subscribers doubled to 343,000.
- Chegg's revenue fell 51% in Q2 2026 after AI and AI search answers made homework help free. Answers are no longer a moat.
- Small-group tutoring has far better unit economics than one-to-one, at a lower price per student.
- Charge by the month or term with a set number of sessions, and write a clear make-up policy.
- Tutors working with children in Australia need a Working With Children Check in their state.
The first subscription product my brother and I built wasn't property software.
It was an e-learning academy with exclusive courses for architecture and engineering students. It had a unique product, a great target audience and, best of all, recurring subscription revenue. It performed so well that it gave us the confidence to build software for that industry.
So I have a soft spot for education subscriptions. They taught me what recurring revenue feels like.
But education has changed more in the last three years than in the previous twenty.
Chegg built one of the biggest consumer subscriptions in education: students paid monthly for homework help and step-by-step solutions. Then generative AI made instant, personalized homework help free, and Google started answering questions directly in search. In Q1 2025 Chegg's subscribers fell 31% to 3.2 million. By Q2 2026, total revenue was down 51% to $51.8 million. The Chegg case study has the full story.
The lesson for every tutor, coach and course creator is blunt. If your subscription sells answers, it's in trouble. If it sells a person who knows the student, keeps them accountable and gets them to a result, it's more valuable than ever.
What do education subscriptions look like in 2026?
There are three main shapes.
All-access course libraries. Udemy deliberately shifted from one-off course purchases to subscriptions. In 2025, subscription revenue rose 8% to $566.0 million, 72% of total revenue, and consumer subscribers doubled to 343,000, even though total revenue was flat. Udemy then combined with Coursera in a deal completed on 11 May 2026. The Udemy case study shows what that switch did to the business.
Tutoring plans. A set number of sessions a month or term, billed in advance, usually with progress reports for parents. This is the core of most tutoring centers.
Communities and memberships. Coaching groups, study clubs and professional learning communities where the value is access to people as much as content. The membership vs subscription guide covers the difference.
Which subscription models fit tutoring and education?
| Model | How it looks | Fit |
|---|---|---|
| Bundled Services | Four weekly sessions a month, plus homework support and a progress report | Core of tutoring |
| Unlimited Content | All-access library of courses, recordings and practice questions | Course creators, online schools |
| Minimum Commitment | Term enrollment, or a 10-week exam preparation program | Tutoring centers, coaching |
| Member Benefits | Community, live Q&A, discounts on workshops and holiday programs | Communities, adult learning |
| Software as a Service | Learning apps and practice platforms | Edtech businesses |
As I wrote in the book, the "unlimited" in the unlimited content model doesn't mean you need thousands of courses. It means unfettered access. The New Masters Academy built its art-lesson library by inviting leading artists to record videos for a share of revenue instead of upfront fees, then charged $39 or $49 a month for access.
What does a 3-tier tutoring offer look like?
Here's an illustrative offer for an Australian tutoring business serving high school students. Prices are monthly during school terms. They include GST, assuming the business is registered.
| Study Group | Weekly 1:1 | Exam Prep | |
|---|---|---|---|
| Monthly price (illustrative) | A$149 | A$340 | A$520 |
| Sessions | Four 60-minute small-group sessions (up to four students) | Four 60-minute one-to-one sessions | Eight 60-minute one-to-one sessions |
| Between sessions | Online practice library | Practice library, homework help by message | Practice library, homework help, two practice exams a term |
| Parent updates | End of term | Monthly | Fortnightly |
| Make-ups | One a month with 24 hours' notice | One a month with 24 hours' notice | Two a month with 24 hours' notice |
| Casual equivalent | A$45 a session | A$95 a session | A$95 a session |
Price your tutoring plan in five minutes
Enter tutor rates, group sizes and session counts, and the free Subscription Price Calculator gives you a monthly fee that covers GST and payment fees.
How do you work out if a tutoring plan is profitable?
The answer depends almost entirely on one thing: how many students share the tutor's hour.
Worked example: one-to-one versus small group
Weekly 1:1 at A$340 a month. Excluding GST: A$309.09. Costs: tutor time, 4 hours at a loaded A$45 an hour: A$180.00. Platform and resources: A$10.00. Card fees at about 2%: A$6.80. Contribution: A$112.29 a month per student (about 36%).
Study Group at A$149 a month, four students. Revenue excluding GST: 4 × A$135.45 = A$541.82 a month. Costs: tutor time, 4 hours at a loaded A$50 an hour (a more experienced group tutor): A$200.00. Room hire: A$40.00. Platform and resources: A$20.00. Card fees: A$11.92. Contribution: A$269.90 a month per group, or about A$67.48 per student (about 50%).
The group student pays less than half as much, and you earn a higher margin on every tutor hour.
Contribution per tutor hour = (Students × monthly price ÷ 1.1 − tutor cost − room − resources − fees) ÷ tutor hours
The one-to-one plan earns about A$28 per tutor hour. The full group earns about A$67. That's why many tutoring businesses use one-to-one as the premium tier and small groups as the volume tier.
But watch the group size. With only two students in the group, contribution falls to about A$4.95 a month in total. Groups need to be full to pay.
Test your own figures in the Subscription Price Calculator, then use the Subscription vs One-off Profit Calculator to compare term enrollments with casual bookings.
Subscription Price CalculatorWork out a profitable monthly price after costs, GST and fees.Open the free tool →How do you launch a tutoring subscription?
- Start with your current students. Which families book weekly already? Offer them a plan first.
- Price on tutor time and group size, using loaded tutor costs.
- Write your make-up and holiday policy before anything else. It's the most common source of disputes.
- Build the between-session value: practice questions, recorded explanations, a message line. AI tools can help you produce these faster.
- Report to parents. Parents pay, students attend. A short monthly update reminds the payer what they're getting.
- Fill groups deliberately. Group students by year level and subject so groups stay full.
- Track retention by term. The end of Term 4 is your biggest churn point. Plan a re-enrollment offer in October.
What are the pitfalls?
Selling answers. If your value is "we'll help with homework questions," AI already does that for free. Sell the plan, the accountability and the result.
Disintermediation. In the book I mention TakeLessons, which links students with teachers and has battled students and teachers going direct since 2006, and Tutor.com, which reduces its share as a tutor's relationship with a student grows. If you run a tutoring agency, keep booking, payment and reporting in your system, so leaving is more trouble than staying.
Make-up debt. Generous make-ups pile up into a backlog of owed sessions. Limit them.
Half-empty groups. A group of two is a loss-making one-to-one at a discount.
Breakage. Some education memberships quietly rely on people who never log in. Those members churn as soon as they notice the charge. Design for engagement instead.
What do Australian tutors and education businesses need to know?
As at October 2026, keep these in mind. This is general information, so get advice on your own offer.
Working With Children Checks. Anyone tutoring children needs the relevant check in their state or territory, and businesses must keep records. Make it part of every tutor's onboarding.
The 2027 subscription rules. The Unfair Trading Practices Act 2026 excludes school and pre-school tuition from its subscription contract rules, but a private tutoring plan or course membership that renews automatically is likely to be caught. Assume you need upfront disclosure, prescribed reminders and an easy way to cancel, online if families sign up online. The subscription trap laws guide explains the rules, and the free trial reminder templates help if you offer a trial lesson that converts.
GST. Private tutoring is generally taxable for a GST-registered business. GST-free treatment for education courses is narrow. Check your position before you set prices.
The accountant's angle: term fees, cash flow and value
Education businesses get paid in advance more often than most. That's wonderful for cash flow, and dangerous if you spend it before you've delivered the sessions. A term paid upfront is income received in advance until each week is taught.
A base of students on monthly or term plans also smooths the year. Instead of a scramble every January, you have a re-enrollment rate you can measure and improve. And a tutoring business with recurring enrollments, documented curriculum and several tutors is a business a buyer can take over. One that depends on the founder teaching every session usually isn't.
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.
What to do next
List every service you deliver and ask the question I asked in the Chegg case: if AI did this for free tomorrow, what would families still pay me for? Build your top tier around that answer.
Then fill one small group, price it properly and compare its margin per tutor hour with your one-to-one sessions.
For more on recurring access models, see the unlimited content model or browse all industry playbooks.
Frequently asked questions
Should tutoring be billed monthly or per term?
Both work. Term billing matches how Australian families think about school and brings cash in earlier, but a large upfront payment can put families off. Monthly billing is easier to start and to budget for. A good compromise is monthly billing with a set number of sessions per month during school terms, and a separate holiday program.
How should I handle missed tutoring sessions?
Write a policy before you launch. A common approach is that sessions canceled with at least 24 hours' notice can be made up within the same month or term, while late cancellations are forfeited because the tutor's time was reserved. Keep make-ups limited so they don't pile up. Explain the policy at sign-up, and in Australia make sure it's part of the key terms you disclose.
How do online course creators use subscriptions?
They offer all-access libraries, communities or memberships instead of selling courses one at a time. In the book I describe the New Masters Academy, which offered art lessons from leading artists with unlimited access for a monthly fee. Udemy made the same shift at scale: subscription revenue reached 72% of its total in 2025, while one-off course sales fell.
Will AI replace tutors?
AI has already replaced a lot of answer-giving, as Chegg's collapse shows. What it hasn't replaced is a person who knows the student, sets the plan, keeps them accountable and talks to the parents. Build your subscription around those things, and use AI as a tool in your sessions rather than competing with it.
Is tutoring GST-free in Australia?
Not usually. GST-free treatment applies to certain education courses, such as those provided by schools and some accredited providers. Private tutoring is generally a taxable service for a GST-registered business. If your turnover is under A$75,000 and you're not registered, you don't charge GST. Check with the ATO or your adviser for your specific offer.
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
- Udemy: Q4 and full-year 2025 results (4 Feb 2026)
- Coursera: Coursera completes combination with Udemy (11 May 2026)
- Higher Ed Dive: Chegg slashes nearly half of its workforce as AI eats into its business (29 Oct 2025)
- Chegg: Q2 2026 results (6 Aug 2026)
- The Subscription Playbook (Robert Coorey, 2022), Chapters 1, 2 and 6: New Masters Academy, TakeLessons and Tutor.com
- Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (No. 64, 2026)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.