How Fuel Tax Credits Work for Australian Businesses
How it works
The Australian Government charges fuel excise — a flat cents-per-litre tax — on petrol, diesel, and other fuels. As of the April 2026 quarter, the excise on diesel is approximately 49.6 cents per litre. Fuel tax credits let GST-registered businesses claim back some or all of that excise for fuel used in business activities.
The credit rate depends on how the fuel is used. For vehicles with a gross vehicle mass (GVM) over 4.5 tonnes travelling on public roads, the credit rate is the excise minus the road user charge (currently around 30.7 cents per litre) — so approximately 18.9 cents per litre. For all other business use — off-road vehicles, machinery, generators, equipment, forklifts, tractors, and light vehicles used for business — the full excise rate applies as the credit. Off-road and non-transport use gets the biggest benefit because there's no road user charge deduction.
Credits are claimed on your BAS at label 7C. You calculate the credit by multiplying the number of eligible litres by the applicable rate for the period the fuel was purchased. Rates change quarterly (indexed in February and August), so you must use the correct rate for each quarter. You need to keep fuel purchase records — tax invoices, receipts, or logbooks — that show the litres purchased, the date, and the supplier.
When to use this calculator
- You run a trucking, logistics, or transport business and want to estimate your quarterly fuel tax credit claim
- You operate farm machinery, mining equipment, or generators that run on diesel and want to check your off-road credit rate
- You want to see the difference between the on-road heavy vehicle rate and the off-road rate for your fleet
- You're preparing your BAS and need to calculate the label 7C amount based on litres purchased this quarter
- You want to compare fuel tax credit rates across different fuel types (diesel, petrol, LPG) and usage categories
Key concepts
- Fuel excise
- A flat tax per litre charged by the Australian Government on fuel at the point of production or import. The excise is built into the price you pay at the pump. For diesel, it's approximately 49.6 cents per litre (indexed biannually). The fuel tax credit scheme refunds some or all of this excise to eligible businesses.
- Road user charge
- A portion of the fuel excise that funds road infrastructure maintenance. It's deducted from the fuel tax credit rate for heavy vehicles (over 4.5t GVM) travelling on public roads. Currently about 30.7 cents per litre. This means a trucking company gets roughly 18.9c/L back on highway diesel, while a farm using the same diesel off-road gets the full ~49.6c/L back.
- Heavy vehicle (over 4.5t GVM)
- Vehicles with a gross vehicle mass exceeding 4.5 tonnes as shown on the compliance plate. Examples: trucks, semi-trailers, buses, road trains. Heavy vehicles on public roads receive a reduced credit rate (excise minus road user charge). The same vehicle used off-road (e.g., on a mine site) receives the full excise rate.
- Eligible business use
- Fuel must be used in carrying on your business. This includes powering vehicles, machinery, generators, and equipment. Fuel for private use is not eligible. If a vehicle is used for both business and private purposes, you can only claim the business-use portion. The ATO may ask for logbooks to substantiate mixed-use claims.
Worked example — Quarterly fuel tax credits for a mixed fleet
Greg runs a farming and transport business. He has a mix of on-road trucks and off-road farm machinery. Here's his diesel usage for the January–March quarter:
| Vehicle / equipment | Use | Litres | Credit rate (c/L) | Credit |
|---|---|---|---|---|
| Kenworth truck (12t GVM) | On-road delivery | 8,500 | 18.9 | $1,606.50 |
| Isuzu truck (8t GVM) | On-road delivery | 4,200 | 18.9 | $793.80 |
| John Deere tractor | Off-road (farm) | 3,100 | 49.6 | $1,537.60 |
| CAT excavator | Off-road (farm) | 1,800 | 49.6 | $892.80 |
| Diesel generator | Stationary (shed) | 600 | 49.6 | $297.60 |
| Hilux ute (under 4.5t) | On-road (business) | 1,400 | 49.6 | $694.40 |
| Summary | Amount |
|---|---|
| Total diesel purchased | 19,600 litres |
| On-road heavy vehicle credits | $2,400.30 |
| Off-road / equipment credits | $3,422.40 |
| Total fuel tax credit (BAS label 7C) | $5,822.70 |
Note: Greg's Hilux ute gets the full excise rate because it's under 4.5t GVM — the road user charge only applies to heavy vehicles. His two trucks get the reduced rate because they're over 4.5t and travel on public roads. The farm machinery and generator get the full rate because they're used off-road or are stationary.