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Introduction to FTC (Fuel Tax Credits)

Before discussing Prism and its capabilities, it is important to understand what Fuel Tax Credits (FTCs) are, who can claim them, and the eligibility criteria for claiming.

What are Fuel Tax Credits?

FTC (Fuel Tax Credits) offer businesses a way to get back the fuel tax excise or custom duty included in the price of fuel used for:

  • Machinery

  • Plant

  • Equipment

  • Heavy vehicles

  • Light vehicles used off public roads or on private roads.

How can you lodge your FTC claim? 

Fuel tax credits allow Australian businesses that use fuel-powered equipment to receive a rebate on some of the excise and customs duty taxes they pay for fuel. This credit can be claimed through the ATO (Australian Tax Office) by submitting your BAS (Business Activity Statements).

The credit amount varies based on when you buy the fuel, the type of fuel and its use. Since fuel tax credits change often, be sure to check the latest rates each time you complete your Business Activity Statement (BAS).

Are you and your business eligible to claim FTCs?

Businesses can get credits for the fuel tax included in the price of fuel they use for their operations. You can claim these credits for fuel that you buy, manufacture, or import, as long as the purchased fuel is used for your business activities. This means the fuel must be used for activities such as running your vehicles or machinery as part of your business. You will need to ensure that the fuel is for business use, and not personal use. 

You can claim FTC (Fuel Tax Credits) on your Business Activity Statement (BAS) just like you claim GST credit.

You can also claim credits when you purchase Fuel.

PLEASE NOTE - Make sure to claim within 4 years. This period starts after the due date of the BAS for the tax period when you get the fuel.

Can you claim FTCs for the fuel you have purchased?

Primarily for claiming fuel tax credits, the purchased fuel must be taxable meaning Fuel Tax (custom duty or excise) must be paid on purchased fuel.

For liquid fuels, eligible options include petrol (unleaded, premium, high octane), diesel, fuel oil, kerosene, and more. You can also claim credits for fuel blends, depending on the amount of biodiesel or ethanol they contain. However, it is essential to note that not all fuels are eligible for all business activities

How can I calculate FTC for my vehicles? What are the different methods?

There are several methods available for calculating your Fuel Tax Credits (FTC). The Australian Tax Office (ATO) recommends two primary methods: the Basic and Simplified methods. Depending on their fleet size, businesses may use either manual or automated approaches to calculate the FTC. Smaller fleets often calculate FTC manually. Prism offers an automated solution for FTC calculation by analysing off-road and on-road usage, as well as the apportionment of fuel consumption based on public and non-public roads. This is achieved through the integration of GPS and vehicle data from telematics, resulting in accurate FTC reports.

To understand how Prism works and how we calculate fuel usage, Please see the link below:

How Prism calculates activity and fuel apportionment

See below to find summary and examples of ATO’s basic and simplified methods.


The basic method for working out FTC for heavy vehicles by documenting the off-road usage to calculate credits, based on eligible fuel use.

This method simplifies the process by applying a standard rate to the quantity of fuel used in heavy vehicles for business purposes, allowing businesses to claim a credit for the fuel tax included in the price of fuel.

ATO suggests businesses to utilise the basic method if the FTC claim is less than $10,000 a year.

Example 1:

A transport company operates a fleet of heavy vehicles. One of their trucks used 10,000 litres of diesel in a given period. After reviewing their trip records, they determine that 7,000 litres were used on public roads and the remaining 3,000 litres were used off public roads.

To calculate the fuel tax credits (FTC) for the tax period, they use the FTC rate applicable for heavy vehicles traveling on public roads, which is 16.5 cents per litre.

  • Diesel used on public roads: 7,000 litres

  • FTC rate: 16.5 cents per litre

  • FTC calculation: 7,000 litres × 0.165 AUD = 1,155 AUD

Therefore, the FTC for the tax period is 1,155 AUD.

Example 2:

A construction company runs heavy machinery on both public and private land. Over the last quarter, they recorded a total diesel consumption of 15,000 litres for their heavy vehicles. By analysing their logbooks, they identify that 9,000 litres were consumed on public roads, while 6,000 litres were used on their private construction sites.

To calculate the FTC for the tax period, they use the FTC rate applicable for heavy vehicles traveling on public roads, which is 16.5 cents per litre.

  • Diesel used on public roads: 9,000 litres

  • FTC rate: 16.5 cents per litre

  • FTC calculation: 9,000 litres × 0.165 AUD = 1,485 AUD

Therefore, the FTC for the tax period is 1,485 AUD.


The simplified method for calculated fuel tax credits allow businesses to use a set rate to claim credits for fuel used in eligible activities. This approach streamlines the calculation process by offering a straightforward way to determine FTC based on a fixed rate, making it easier for businesses to manage and claim their fuel tax entitlements.

Example 1: Using the Basic Method for Heavy Vehicles

ABC Transport uses the basic method for heavy vehicles, claiming less than $10,000 annually in fuel tax credits. During the BAS period, they purchased 5,000 litres of diesel. Using the rate at the end of the period (for example, 16.5 cents per litre), they calculate their fuel tax credit as follows:

5,000 litres x 0.165 = $825

Therefore, ABC Transport will claim $825 in fuel tax credits on their BAS.

Example 2: Percentage Use Method

XYZ Construction uses the percentage use method to simplify their fuel tax credit claim. They purchase 10,000 litres of fuel, and estimate that 70% is used for eligible activities. Applying the rate of 42.3 cents per litre (for example), their fuel tax credit calculation is:
10,000 litres x 70% = 7,000 litres

7,000 litres x 0.423 = $2,961

What records are required when lodging your claim?

When lodging your Fuel Tax Credits (FTC) claim, keep these records:

1. Fuel Purchase Records

  • Invoices and Receipts: These should show the amount of fuel bought, the cost, and the date of purchase.

  • Supplier Statements: Any statements or documentation from your fuel supplier should be kept as proof of purchase.

2. Activity and Mileage Logs

  • Usage Logs: Record what each batch of fuel is used for, such as specific machinery, equipment, or vehicles.

  • Mileage Logs: For each business trip, note the start and end odometer readings to accurately track the distance traveled.

3. Fuel Consumption Records

  • Usage Rates: Document how much fuel each vehicle or piece of equipment uses over a certain period.

  • Fuel Allocations: If you use fuel for both business and personal purposes, keep records that show how you split the fuel usage between the two.

4. Record Maintenance

  • Digital Records: Use accounting software or digital logs to keep your records organized and make sure to back up your data regularly.

  • Physical Records: Keep physical copies of all receipts, invoices, and logs in a safe and organized manner.

Tips for Keeping Records

  • Consistency: Record information as soon as possible to ensure accuracy and completeness.

  • Organisation: Keep records organised by date and category to make them easy to find and review.

  • Compliance: Ensure your records meet the specific requirements set by the Australian Taxation Office (ATO).

By maintaining these detailed and accurate records, you can ensure that your FTC claims are valid and supported by the necessary documentation.

In case you are facing or expecting an audit, we have designed a free tool can help you: The Audit Readiness Scorecard aids businesses in preparing for ATO audits by assessing their readiness and helping to ensure that their records and processes meet requirements.

Additional resources and detailed information from the ATO.

We recommend to please refer to the ATO resources below, as they will contain a lot of useful and valuable information in relation to fuel tax credits.

PLEASE NOTE: For FTC rates (From 1 July 2024 to 4 August 2024), please refer to the link above. These rates are updated periodically by the ATO.

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