Quick answer
Fuel is claimable in New Zealand through the vehicle method you’ve chosen for that vehicle [1] . The kilometre rates (2025-26: Tier 1 petrol $1.20/km, with fuel-type-specific rates) already include fuel, so nothing extra is claimable on top. The actual-cost method claims the business share of real fuel spend, set by a logbook, with the 15% GST claimable on the business share. Commuting fuel is private either way.
Is fuel tax deductible in New Zealand?
Yes, for genuine business travel, through whichever vehicle method you have adopted. Inland Revenue gives four routes for petrol, diesel, hybrid and electric vehicles: a logbook to set the business share, 25% of running costs without a logbook, the kilometre rates, or actual costs, and you stick with the one you choose for as long as you own the vehicle [1] . The kilometre rates bundle fuel, servicing, insurance, registration, and depreciation into a per-kilometre figure, differentiated by fuel type precisely because running costs differ: diesel carries the highest Tier 1 rate at $1.30, a petrol hybrid the lowest at $0.90 [3] .
The actual-cost route claims the business-use percentage of real spend instead. That percentage comes from a logbook kept for at least 90 consecutive days, which then holds for up to three years while your usage pattern stays representative. Companies claim actual costs for their vehicles as a matter of course and manage private use through FBT rather than apportionment.
How much can you claim?
Under the actual-cost method: a courier’s van burns $6,200 of diesel in the year, and the logbook shows 85% business use. The fuel deduction is $5,270, alongside the same share of every other running cost. Under the kilometre rates, the same claim is folded into the tiers:
| 2025-26 rate | Petrol | Diesel | Petrol hybrid | Electric |
|---|---|---|---|---|
| Tier 1 (business share of first 14,000 km total) | $1.20 | $1.30 | $0.90 | $1.22 |
| Tier 2 (business travel above 14,000 km) | 37c | 38c | 24c | 23c |
The tiers reflect that fixed costs dominate early kilometres: Tier 1 carries depreciation and overheads, Tier 2 approximates marginal running costs, which is why it collapses to 23c for an EV that burns no fuel at all. Inland Revenue publishes the next year’s rates around May; these 2025-26 rates serve the income year ended 31 March 2026.
GST on fuel
A GST-registered business claims the input tax on the business share of fuel at 15%, from receipts, with the logbook percentage doing the apportionment. The kilometre rates do not carry GST: they simplify income tax only, so a registered business that wants fuel GST credits keeps actual-cost records regardless. Fuel bought for a company vehicle that is also used privately follows the FBT and apportionment settings for that vehicle rather than a simple 100% claim.
Record-keeping requirements
Keep fuel receipts, the 90-day logbook and its renewal every three years, odometer readings, and the annual claim workings, all for seven years. The logbook is the load-bearing document: without it, Inland Revenue can limit the business-use claim, and a percentage asserted without one rarely survives review.
How to claim, step by step
- Confirm which method the vehicle is on: kilometre rates or actual costs. The choice was made when the vehicle entered the business.
- Under the kilometre rates, record business kilometres and apply the tiered, fuel-type-specific rates; fuel receipts are not part of the claim.
- Under actual costs, capture every fuel receipt and keep the 90-day logbook current.
- Apply the logbook percentage to total fuel and running costs at year end and claim it in the IR3 or the company return.
- If GST registered, claim 15% on the business share of fuel each period, from receipts.
- Exclude commuting kilometres and keep everything for seven years.
Common mistakes
- Claiming fuel receipts on top of the kilometre rates.
- Using the petrol rate for a diesel or hybrid; the 2025-26 tiers differ by fuel type.
- Claiming GST through the kilometre rates, which carry none.
- Counting home-to-work travel as business kilometres.
- Letting the 90-day logbook age past three years and rolling the old percentage forward.
Software that helps
- Driversnote keeps the logbook and applies the current IRD kilometre rates automatically.
- ExpenseFlow captures fuel receipts as they happen, applies the 15% GST treatment to the business share, flags vehicle costs for apportionment rather than a 100% claim, and syncs approved spend to Xero with the receipt attached, or to QuickBooks Online as a coded bill.
- Hubdoc collects fuel-card statements monthly so the actual-cost trail stays complete.
FAQ
See the answered questions above for the method interplay, the 2025-26 tier rates, GST, commuting, and records.
References
Sources and references
Every figure, threshold, deadline, and regulatory rule cited in this guide is traceable to an official government publication. URLs are reproduced in full so any reader can verify the claim at source. Numbers are subject to change at each fiscal event; we re-check this list at every quarterly refresh of this guide.
-
[1]
Inland Revenue · Vehicle expenses
https://www.ird.govt.nz/vehicle-expensesUpdated 3 June 2026. Logbook, 25% of running costs without a logbook, kilometre rates, actual costs; stick with one method while you own the vehicle.
Retrieved 2026-10-10
-
[2]
Inland Revenue · Use a logbook
https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/claiming-vehicle-expenses/use-a-logbookAt least 90 consecutive days; valid up to 3 years unless business use changes by more than 20%.
Retrieved 2026-10-10
-
[3]
Inland Revenue · Kilometre rates 2025-2026
https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/claiming-vehicle-expenses/kilometre-rates-2025-2026Updated 8 July 2026. Tier 1 to 14,000 km of total travel: petrol $1.20, diesel $1.30, hybrid 90c, electric $1.22; Tier 2: 37c, 38c, 24c, 23c.
Retrieved 2026-10-10
From ExpenseFlow
GST coding on autopilot
ExpenseFlow reads every receipt, assigns the right GST treatment and account code, and syncs to Xero or QuickBooks Online once you approve.