ATO Fuel Tax Credit Rates Calculator
Calculate your eligible fuel tax credits for business activities. Updated with the latest ATO rates.
Comprehensive Guide to ATO Fuel Tax Credit Rates (2024)
The Australian Taxation Office (ATO) fuel tax credit scheme allows businesses to claim credits for the fuel tax (excise or customs duty) included in the price of fuel used in eligible business activities. This guide explains how the system works, current rates, eligibility criteria, and how to maximize your claims.
What Are Fuel Tax Credits?
Fuel tax credits provide businesses with a credit for the tax included in the price of fuel used in:
- Machinery and plant
- Heavy vehicles for travelling on public roads
- Light vehicles travelling on private roads (with some exceptions)
- All other business uses in eligible activities
Current Fuel Tax Credit Rates (2023-24)
The rates vary depending on when you acquire the fuel, what fuel you use, and your business activity. Here are the current rates as of 1 July 2023:
| Fuel Type | Transporting Goods on Public Roads | All Other Business Uses |
|---|---|---|
| Petrol | 18.8 cents per litre | 18.8 cents per litre |
| Diesel | 18.8 cents per litre | 48.3 cents per litre |
| LP Gas | 13.0 cents per litre | 13.0 cents per litre |
| Biodiesel (B100) | 0 cents per litre | 0 cents per litre |
| Ethanol (E10 or E85) | 18.8 cents per litre (pro-rated) | 18.8 cents per litre (pro-rated) |
Important: Rates change regularly. Always check the official ATO fuel tax credit rates for the most current information.
Eligibility Criteria
To claim fuel tax credits, you must:
- Be registered for GST (except for some non-profit organizations)
- Use the fuel in your business (including as a sole trader or partnership)
- Use the fuel in an eligible activity (see below)
- Keep records to show you’re entitled to the claim
Eligible Business Activities
The following activities are generally eligible for fuel tax credits:
- Transporting goods: On public roads in vehicles with a GVM > 4.5 tonnes
- Agriculture: All fuel used in primary production activities
- Mining: All fuel used in mining operations
- Forestry: All fuel used in forestry activities
- Fishing: All fuel used in commercial fishing operations
- Manufacturing: Fuel used in non-road equipment
- Construction: Fuel used in non-road equipment
Ineligible Activities
You cannot claim fuel tax credits for:
- Fuel used in light vehicles (≤ 4.5 tonnes GVM) travelling on public roads (except for some specific cases)
- Fuel used in vehicles designed mainly for carrying passengers (e.g., buses, taxis)
- Fuel used for private purposes
- Fuel that is GST-free (e.g., for export)
- Fuel used in recreational boats
How to Calculate Your Fuel Tax Credit
The basic formula for calculating your fuel tax credit is:
Total litres × Applicable rate = Fuel tax credit amount
However, there are several factors that can affect your calculation:
- Fuel type: Different fuels have different rates
- Business activity: Some activities have reduced rates
- Vehicle type: Light vs. heavy vehicles have different rules
- Public road use: Percentage of fuel used on public roads affects the claim
- Financial year: Rates change between financial years
Record-Keeping Requirements
You must keep records for at least 5 years that show:
- The amount of fuel you acquired
- When you acquired it
- How you used it in your business
- How you worked out your claims
Acceptable records include:
- Fuel receipts, invoices or tax invoices
- Credit card statements showing fuel purchases
- Fuel cards statements
- Logbooks or travel diaries
- Business activity statements (BAS)
Claiming Fuel Tax Credits
You can claim fuel tax credits:
- On your business activity statement (BAS)
- As a refund if you’re not registered for GST (in limited circumstances)
- Through your tax return (for some non-profit organizations)
The most common method is claiming through your BAS. You’ll need to:
- Calculate your eligible fuel tax credits for the period
- Include the amount at label 7D on your BAS
- Keep all required records
Common Mistakes to Avoid
Many businesses make errors when claiming fuel tax credits. Here are the most common mistakes:
- Claiming for ineligible activities: Such as private use or light vehicles on public roads
- Using incorrect rates: Always use the rate that applies when you acquired the fuel
- Poor record-keeping: Without proper records, your claims may be disallowed
- Double-counting: Claiming the same fuel on multiple BAS
- Not adjusting for public road use: Forgetting to reduce claims for fuel used on public roads in light vehicles
Fuel Tax Credit Rates History
The fuel tax credit rates have changed significantly over the years. Here’s a historical comparison of diesel rates for all business uses (excluding road transport):
| Financial Year | Diesel Rate (cents per litre) | Significant Changes |
|---|---|---|
| 2015-16 | 13.6 | Rate began increasing annually |
| 2016-17 | 14.5 | Small annual increase |
| 2017-18 | 15.3 | Continued gradual increase |
| 2018-19 | 41.6 | Significant increase due to policy changes |
| 2019-20 | 42.3 | Small adjustment |
| 2020-21 | 43.3 | Annual indexation |
| 2021-22 | 43.9 | Continued indexation |
| 2022-23 | 46.6 | Temporary 6-month halving of rates (23.3 cents) from 30 March 2022 |
| 2023-24 | 48.3 | Return to full rates after temporary reduction |
Special Cases and Exceptions
There are several special situations that affect fuel tax credit claims:
Light Vehicles on Private Roads
You can claim for fuel used in light vehicles (≤ 4.5 tonnes GVM) when:
- Travelling on private roads (not public roads)
- Operating auxiliary equipment (e.g., refrigeration units)
- Used in mining operations on private roads
Alternative Fuels
Special rules apply to alternative fuels:
- Biodiesel: B100 has a 0 cent rate, but blends have pro-rated rates
- Ethanol: E10 has 18.8 cents (10% ethanol, 90% petrol rate)
- LP Gas: Has its own specific rates
Non-Profit Organizations
Some non-profit organizations can claim fuel tax credits even if they’re not registered for GST. This includes:
- Charities
- Non-profit hospitals
- Public educational institutions
- Religious institutions
How to Maximize Your Fuel Tax Credit Claims
To ensure you’re claiming everything you’re entitled to:
- Track all fuel purchases: Use fuel cards or dedicated accounts for business fuel
- Separate business and private use: Maintain clear records of business vs. private fuel use
- Use the correct rates: Double-check the rates for each fuel type and activity
- Claim regularly: Don’t let credits accumulate – claim them on each BAS
- Review your claims: Have your accountant review your fuel tax credit calculations
- Stay updated: Rates change regularly, so check the ATO website for updates
- Consider fuel management software: Specialized software can help track and calculate claims
ATO Compliance and Audits
The ATO actively monitors fuel tax credit claims and conducts audits. To avoid problems:
- Ensure all claims are supported by proper documentation
- Be prepared to explain how you calculated your claims
- Keep records for at least 5 years
- Be consistent in your claiming methods
- If audited, cooperate fully with the ATO
Penalties for incorrect claims can include:
- Repayment of over-claimed amounts
- Interest charges
- Administrative penalties
- In serious cases, prosecution for fraud
Recent Changes and Updates
The fuel tax credit system has seen several recent changes:
Temporary Reduction in Rates (2022)
From 30 March 2022 to 28 September 2022, fuel tax credit rates were temporarily halved as part of the government’s response to rising fuel prices. The rates returned to normal on 29 September 2022.
Indexation Changes
Fuel tax credit rates are now indexed twice yearly (February and August) instead of annually. This means rates may change more frequently.
Increased Scrutiny
The ATO has increased its compliance activities around fuel tax credits, particularly focusing on:
- Claims for light vehicles on public roads
- Overclaiming for private use
- Incorrect rate applications
- Lack of proper documentation
Alternative Approaches to Fuel Tax Credits
For businesses with complex fuel usage, there are alternative methods to calculate claims:
Simplified Method
Small businesses (turnover < $10 million) can use simplified record-keeping methods, including:
- Estimating fuel use based on odometer readings
- Using a fixed percentage for business use
- Sampling methods for representative periods
Apportionment Methods
For mixed business/private use, you can apportion claims using:
- Odometer records: Track business vs. private kilometers
- Logbooks: Maintain detailed travel records
- Fixed percentages: Use a reasonable estimate of business use
Fuel Management Systems
Advanced systems can:
- Track fuel purchases automatically
- Allocate fuel to specific vehicles/equipment
- Generate reports for BAS preparation
- Calculate claims using current rates
Industry-Specific Considerations
Transport Industry
Transport businesses should note:
- Different rates apply for heavy vs. light vehicles
- Auxiliary equipment (e.g., refrigeration) may qualify for higher rates
- Fuel used for idle time may be claimable
- Toll costs are separate from fuel tax credits
Agriculture Sector
Farmers can claim for:
- All fuel used in tractors and farm equipment
- Fuel used in light vehicles on farm (private) roads
- Fuel for generators and irrigation pumps
- Fuel used in harvesting and processing
Mining and Resources
Mining operations have special rules:
- All fuel used in mining equipment is eligible
- Fuel for light vehicles on mine sites is claimable
- Different rates may apply for exploration vs. production
- Fuel used in employee transport may have restrictions
Future of Fuel Tax Credits
The fuel tax credit system is likely to evolve in response to:
- Environmental policies: Potential changes to encourage cleaner fuels
- Electric vehicles: Possible expansion to include electricity for EVs
- Fuel price volatility: Adjustments to support businesses during price spikes
- Administrative simplification: Potential streamlining of claiming processes
Businesses should stay informed about potential changes through:
- The ATO website
- Industry associations
- Professional advisors
- Government budget announcements
Important Disclaimer: This calculator and guide provide general information only. Fuel tax credit rates and eligibility criteria can change. For specific advice regarding your situation, consult a qualified tax professional or visit the official ATO fuel tax credits page. The information provided does not constitute tax advice.
Additional Resources
For more information, refer to these authoritative sources:
- ATO Fuel Tax Credits – Official ATO information page
- ATO Fuel Tax Credit Rates – Current and historical rates
- Department of Climate Change, Energy, the Environment and Water – Fuel quality standards and alternative fuels information