Fuel tax credit rates 2026: the August change, the road user charge and a worked BAS claim

Fuel tax credit rates from 1 July 2026

The ATO publishes two tables for 2026–27 so far. The change took effect on 3 August 2026, not 1 August, and the February 2026 change was on 2 February. Use the ATO’s dates when you split a claim.

The next change is the February 2027 CPI indexation. The ATO hasn’t published the date or the rates yet, so check its rates page before you prepare a BAS that runs past the end of January.

Why the rates changed four times in 2026

Rates are indexed to CPI twice a year, in February and August. In 2026 the Government also cut fuel excise twice after announcing its National Fuel Security Plan in March, and every excise change moves the credit.

• 2 February 2026: CPI indexation took the rates to 52.6c for all other uses and 20.2c for heavy vehicles on roads.
• 1 April 2026: excise was cut by 60.9% and the road user charge set to zero for three months, so both columns were 20.6c.
• 1 July 2026: a smaller cut of 30.4% for one month, with the road user charge at 16.4c. All other uses dropped to 36.6c; heavy vehicles got 20.2c.
• 3 August 2026: the relief ended and August indexation applied. All other uses went to 53.7c and heavy vehicles to 21.3c.

The pattern to remember: the heavy vehicle rate is the full rate less the road user charge, and it’s nil where the charge is higher. That’s why LPG and LNG in a heavy vehicle on a public road earn nothing from 3 August, and why a farm’s off-road diesel rate swung by 33.1c a litre between June and August while a truck’s on-road rate barely moved.

Who can claim fuel tax credits

A business can claim for eligible fuel it acquires, manufactures or imports for use in carrying on its enterprise. It must be registered for GST, or required to be, when it acquires the fuel, and registered for fuel tax credits when it lodges the claim.

Only one entity can claim the credit for the same fuel. A contract can say who claims, but the entitlement still follows who acquired the fuel and used it in their business.

How to calculate fuel tax credits

Repeat the first three steps for every combination of fuel, business use and rate period in the BAS, then add the results.

1. 01

   Work out the eligible quantity.

   Count the litres (or kilograms) for each activity, leaving out private use, ineligible activities and fuel lost or stolen. Any fair and reasonable apportionment method is accepted, so keep the working.

2. 02

   Find the rate for the day the fuel was acquired.

   Use the acquisition date, not the day the fuel was used or the day the BAS is prepared. Match the business use to the right column.

3. 03

   Multiply and convert.

   Quantity × rate in cents, divided by 100, gives dollars. Do it separately for each rate.

4. 04

   Add the amounts and report at 7D.

   Total the period’s credits, add any increasing adjustments, and report the whole dollar amount at label 7D.

A worked example: one quarter across two rate periods

Bull Antics Pty Ltd lodges quarterly. In July to September 2026 it bought diesel for a tractor, a generator and a tip truck over 4.5 tonnes, coded to three fuel accounts in Xero. 7 of the 9 purchases have the litres in the narration; the other 2 come from the fuel dockets. The bookkeeper also found 200 litres of grader diesel, bought in May, that missed the April to June BAS. The client and accounts are the sample on our fuel tax credit calculator page, moved to this quarter.

1. 01

   Group by rate period and use.

   Tractor and generator diesel is “all other business uses”. The tip truck’s is heavy vehicle on public roads. Fuel bought to 2 August goes in one group, fuel from 3 August in the other.

2. 02

   July group.

   530 L × 36.6c = $193.98, and the truck’s 400 L × 20.2c = $80.80.

3. 03

   August and September group.

   2,708 L × 53.7c = $1,454.20, and the truck’s 450 L × 21.3c = $95.85.

4. 04

   The late grader fuel.

   200 L at the rate when it was bought, 20.6c, is $41.20. It increases the claim, so it goes in 7D.

5. 05

   Report the total.

   $1,824.83 for the quarter plus $41.20 is $1,866.03. Label 7D is $1,866 and label 7C is 0.

Had the preparer used the 1 July rates for every litre in the quarter, the claim would have been $1,356.81, which is $468.02 short. Most of the gap is the tractor diesel bought after 3 August.

Simplified methods for claims under $10,000 a year

A client claiming less than $10,000 in fuel tax credits a year can use any of the ATO’s simplified methods, and can start or stop using them at any time.

• Rate at the end of the BAS period. Total the period’s litres for each use and apply the rate in force on the last day of the BAS period, instead of splitting at the rate change.
• Work out the litres from dollars. Litres = total fuel cost ÷ the average price per litre for the period, for clients whose dockets don’t show quantities.
• Basic method for heavy vehicles. On-road litres are public-road kilometres × the ATO’s consumption rate for the truck’s weight; everything else is off-road at the higher rate. Total kilometres × 98.4% can stand in for public-road kilometres if that’s all the logbook shows.
• Simplified records. Bank, fuel card or contractor statements that show only dollars are acceptable support.

For Bull Antics, the end-of-period method gives $1,919.86 on the quarter’s fuel instead of $1,824.83, because every litre takes the 3 August rate. That’s $95.03 more, and it’s allowed only if the client’s claims stay under $10,000 a year. When rates fall during a quarter, the same method gives less, so check the direction before choosing it.

Records to keep for a fuel tax credit claim

Records must be in writing, in English and kept for five years. A claim needs more than one kind of record:

• When fuel was bought and how much: tax invoices, fuel card statements, supplier statements.
• What it was used for: logbooks, job sheets, contracts, equipment hire or ownership records.
• How it was split between rates: odometer readings, GPS or telematics reports, engine hours, route distances.
• That the right rate was used: the ATO calculator output, a calculation worksheet, or the report from the system you calculated it in.

Without adequate records the client may have to repay the credits, with penalties and interest. Most firms keep the calculation with the BAS workpapers for the period.

Labels 7D and 7C, adjustments and the four-year limit

• Label 7D takes the period’s fuel tax credits and any adjustment that increases them. Write 0 if there’s nothing to report.
• Label 7C takes adjustments that decrease the claim, such as fuel claimed but later lost, stolen or used less than intended.
• Missed fuel from an earlier period can go on the current BAS or a revised earlier BAS, at the rate from when it was acquired.
• Changed use after a claim is adjusted at the rate used for the original claim.
• Four years is the limit for a credit not claimed before. It starts the day after the BAS for the period the credit relates to was due to be lodged.

Fuel tax credits can only be claimed on a BAS, not an annual GST return. They’re also assessable income, so they belong in the tax return as assessable government industry payments.

Common fuel tax credit mistakes reviewers catch

• One rate for a split quarter. July to September 2026 has two rate periods. In the example, using the 1 July rates under-claims by $468.02.
• The wrong change date. The August 2026 rates start on 3 August. Fuel bought on 1 or 2 August is still on the July rates.
• Late claims at today’s rate. April to June 2026 fuel claimed now is at 20.6c, the relief rate, not 53.7c.
• Generators and machinery coded as road use. They’re all other business uses; only a heavy vehicle travelling on a public road takes the lower column.
• Light vehicles on the road. Utes and cars on public roads aren’t eligible, even for a business that also runs heavy vehicles.
• Gas in heavy vehicles from 3 August. LPG, LNG and CNG on public roads are nil because the road user charge exceeds the rate.
• A blank label 7D. The ATO wants a 0.
• Litres worked out from dollars for a large claimant. That shortcut is only for claims under $10,000 a year.

A fuel tax credit routine for BAS season

1. 01

   Load the new rates when they change.

   Check the ATO rates page in early February and early August, and after any excise announcement. Note the exact start date.

2. 02

   Ask clients to write litres in the narration.

   A habit like “Tractor diesel 500L” saves a docket search at BAS time.

3. 03

   Split each claim by rate period and use.

   Group the period’s fuel before multiplying. Flag any quarter with a rate change in it.

4. 04

   Pick up late fuel deliberately.

   Record which period each late purchase belongs to and use that period’s rate.

5. 05

   Keep the working with the BAS.

   Save the calculation that shows the litres, rates and totals behind 7D and 7C.

If BAS runs as a recurring job in your practice, attach this routine to that job. AccountKit’s workflow keeps recurring jobs and reminders against the client or client group, so the check sits where the work happens.

How AccountKit calculates fuel tax credit claims

AccountKit’s fuel tax credit calculator is for Australian practices. You set up each client once with its BAS frequency and start date, choose standard or simplified, and pick the Xero fuel accounts to watch, each with a default fuel type, business use and business-use percentage.

Fuel purchases sync from Xero, and volumes written in the narration, such as “100L”, are read into the quantity field for you to review. Lines with no volume stay at zero until you enter them. You add prior-period adjustments, including negative quantities for a decrease, then finalise to lock the claim and produce a PDF with the figures for labels 7D and 7C. The next period rolls over from the last. The calculator is included in the base AccountKit subscription; pricing lists the plans.