Fuel Tax Credits for Farmers
Fuel is one of the biggest ongoing expenses for Australian farmers. Whether it’s powering tractors, irrigation pumps, generators or harvesters, fuel is central to running a productive operation.
The good news is that eligible businesses — including farms — can claim Fuel Tax Credits (FTC) from the Australian Taxation Office (ATO).
This credit refunds part of the fuel tax (excise) included in the price of petrol and diesel used for business purposes, putting real money back into your business.
What are Fuel Tax Credits?
Fuel Tax Credits (FTC) provide a credit for the fuel tax you’ve already paid when the fuel is used in eligible business activities such as agriculture, forestry, fishing or construction.
They apply to both petrol and diesel, and the rate depends on how the fuel is used.
In short — if your fuel isn’t being used for normal road travel, you can usually claim back part (or all) of the tax paid.
Example: A Queensland grain farmer uses petrol and diesel to power tractors, harvesters, irrigation pumps and generators.
These off-road uses are fully eligible for Fuel Tax Credits, helping reduce overall operating costs.
Why the system exists
The government recognises that businesses like farms, construction and transport use fuel in ways that don’t always involve public roads.
Because that fuel doesn’t contribute to road wear, it shouldn’t be taxed as if it does.
Fuel Tax Credits refund that road-use component of the excise, ensuring a fairer system for Australian primary producers.
Who is eligible?
You may be eligible to claim Fuel Tax Credits if you use petrol or diesel for:
- Farming, forestry or fishing operations
- Agricultural machinery such as tractors, harvesters or quad bikes
- Irrigation pumps, generators or stationary engines
- Heavy vehicles (over 4.5 tonnes GVM) used on or off public roads
- Other off-road plant or machinery such as loaders or excavators
Example: John, a dairy farmer in Victoria, uses diesel and petrol for both irrigation equipment and heavy machinery.
By registering for Fuel Tax Credits, he becomes eligible to claim credits through his BAS — saving thousands each year.
Managing fuel tax claims is easier when your business expenses are tracked automatically.
Thriday helps farmers and contractors automatically categorise business fuel expenses — saving hours at tax time.
How much can you claim?
The FTC rate varies depending on fuel type and use, and is updated quarterly by the ATO.
| Fuel Use | Eligibility | Claim Type |
| Off-road farm equipment (tractors, pumps, generators, harvesters) | Eligible | Claim full FTC rate |
| Heavy vehicles operating off public roads | Eligible | Full FTC rate |
| Heavy vehicles on public roads (>4.5t GVM) | Eligible | Reduced FTC rate |
| Light vehicles on public roads | Not eligible | Normal fuel tax applies |
Check the latest quarterly rates on the ATO’s Fuel Tax Credits Rates page:
https://www.ato.gov.au/Business/Fuel-schemes/Fuel-tax-credits—business/Rates/
How to register for Fuel Tax Credits
You’ll need to register for Fuel Tax Credits before you can claim them. Here’s how:
- Visit fueltaxassist.com.au to get started.
- Our team will help you register for Fuel Tax Credits with the ATO under your ABN.
- Once registered, you (or your accountant/bookkeeper) can include FTC claims in your Business Activity Statement (BAS).
Note: Fuel Tax Assist helps with registration only. We don’t calculate or lodge claims on your behalf.
Common Questions
Can hobby farmers claim Fuel Tax Credits?
No — only businesses carrying out genuine farming, forestry or fishing operations are eligible.
Do I need an ABN?
Yes. You must have an active ABN to register for Fuel Tax Credits.
How often can I claim?
Most businesses claim quarterly via their BAS, though monthly claims are also possible.
What records do I need?
You’ll need tax invoices, fuel receipts, usage logs and equipment records to support your claim if audited by the ATO.
Key benefits for farmers
- Reduce costs: Claim back thousands in fuel tax each year.
- Fairness: Avoid paying road-use tax on off-road and agricultural fuel.
- Broad eligibility: Covers both petrol and diesel used in farming machinery.
- Cash-flow improvement: Credits offset GST or other tax obligations.
Fuel Tax Assist — we make registration easy
At Fuel Tax Assist, we help Australian farmers and rural businesses register for Fuel Tax Credits quickly and correctly. We:
- Manage your ATO registration from start to finish
- Ensure you’re set up correctly to claim through your BAS
- Keep your registration compliant with ATO requirements.
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