How to Claim Fuel in Australia (2026 Guide)

Quick answer

Whether you can claim fuel directly depends on your car-expense method. Under the cents per kilometre method, fuel is already inside the 91c rate for 2026-27 and cannot be claimed separately. Under the logbook method, you claim the business-use percentage of actual fuel costs, plus the GST credit on that share if registered. Fuel tax credits are for heavy vehicles and off-road use, not cars.

Is fuel tax deductible in Australia?

Fuel for business travel is deductible, but the route matters. Individuals and partnerships claiming a car choose between two methods each year, and only one of them sees fuel as a line item. The cents per kilometre method pays a flat 91 cents per business kilometre for 2026-27 (88 cents for 2025-26 returns), capped at 5,000 km per car, and that rate is all-inclusive: fuel, registration, insurance, servicing, and depreciation. The logbook method instead claims the business-use percentage of every actual running cost, fuel included, with no cap.

Companies and trusts do not use the cents method at all; they claim actual costs and manage private use through fringe benefits tax. And the usual travel boundary applies everywhere: fuel burned commuting between home and a regular workplace is private, subject to narrow exceptions such as carrying bulky tools or genuinely itinerant work.

How much can you claim?

Under the logbook method, the claim is actual fuel spend multiplied by the business-use percentage from a 12-week logbook. Worked example: a tradie spends $4,100 on diesel in 2026-27, and her logbook establishes 80% business use. The fuel deduction is $3,280, claimed alongside the same share of servicing, insurance, registration, and depreciation. Her offsider, doing 3,900 business kilometres a year in his own car, is better off skipping fuel receipts entirely and claiming 3,900 x 91c, which is $3,549 under the cents method.

Vehicles that are not cars (utes and vans with a payload over one tonne, trucks, machinery) are outside the two-method choice: their fuel is claimed at actual cost at the business share, whoever owns them.

GST on fuel

Fuel carries 10% GST, and a GST-registered business claims an input tax credit on the business share, coded GST on Expenses in Xero. Under the logbook method the business share is the logbook percentage. Note the asymmetry: the cents per kilometre method is an income tax calculation only, so businesses that want fuel GST credits need actual-cost records to support them on the BAS.

Fuel tax credits are a separate system and a common misconception. They refund the excise in fuel for heavy vehicles over 4.5 tonnes on public roads and for fuel used off public roads in business plant; a car on public roads earns none.

Record-keeping requirements

For the logbook method: the 12-week logbook (valid up to five years while representative), odometer readings each year, and receipts for fuel or a reasonable odometer-based estimate where allowed. For the cents method: a record showing how the business kilometres were worked out, such as a trip diary. The ATO requires records to be kept for five years, and disallows reconstructed logbooks routinely.

How to claim, step by step

1. Pick the method for the year: cents per kilometre (fuel included, 5,000 km cap) or logbook (actual fuel at the business percentage).
2. Under the logbook method, keep the 12-week logbook and capture every fuel receipt as it happens.
3. Apply the logbook percentage to total fuel and other running costs at year end.
4. Claim the same percentage of the GST on fuel as input tax credits on your BAS if registered.
5. Enter the deduction at the motor vehicle expenses label of the return, and keep records for five years.
6. Re-run the logbook if your usage pattern changes or the five years run out.

Common mistakes

• Adding fuel receipts on top of the cents per kilometre rate.
• Claiming fuel tax credits for a car driven on public roads.
• Claiming 100% of fuel for a vehicle that also does private trips.
• Letting the logbook lapse past five years and keeping the old percentage anyway.
• Forgetting that commuting fuel is private, even in a signwritten work car.

Software that helps

• Driversnote keeps the ATO-compliant logbook that sets the business percentage the fuel claim depends on.
• ExpenseFlow captures fuel receipts as they happen, codes them GST on Expenses, flags vehicle costs for business-use apportionment rather than a 100% claim, and syncs the approved spend to Xero or QuickBooks with the receipt attached.
• ATO myDeductions records both trips and fuel costs in the ATO’s own app and prefills the return.

FAQ

See the answered questions above for the method interplay, logbook mechanics, GST credits, fuel tax credits, and records.