Fuel Tax Credits for Construction Plant in 2026: Rates, Records and Common Mistakes

Oct 7

5 min read

If you run excavators, loaders, generators or a fleet of trucks, fuel tax credits are probably one of the bigger numbers on your BAS. This year they've also been one of the hardest to get right. The ATO has noted there were four rate changes in a few months, because of the temporary fuel excise relief that ran from April and ended on 3 August 2026.

Here's what construction, civil, EPC and solar businesses need to know for the July to September quarter and beyond.

What you can claim

Fuel tax credits give back some or all of the fuel excise included in the price of fuel you use in your business. For construction businesses the two categories that matter most are:

Off-road use, such as excavators, bobcats, loaders, rollers, cranes, generators, compressors and other plant on site. This is the "all other business uses" category, and it gets the highest rate.
Heavy vehicles on public roads, meaning vehicles with a gross vehicle mass over 4.5 tonnes, such as tippers, truck-mounted cranes and delivery trucks. The credit is reduced by the road user charge, so the rate is lower. The vehicle also has to meet the environmental criteria.

Fuel used in light vehicles (4.5 tonnes or less) travelling on public roads doesn't attract a credit. That means utes and site cars generally don't count while they're on the road.

The rates for 2026

The rate depends on when you acquired the fuel, not when you used it. For diesel and other liquid fuels, the ATO's published rates are:

1 April to 30 June 2026: 20.6 cents per litre for both heavy vehicles on public roads and off-road use. The road user charge was set to zero for three months.
1 July to 2 August 2026: 20.2 cents per litre for heavy vehicles on public roads, and 36.6 cents per litre for off-road and other business uses.
From 3 August 2026: 21.3 cents per litre for heavy vehicles on public roads, and 53.7 cents per litre for off-road and other business uses.

The jump from 3 August is because the temporary excise relief ended and excise went back to its usual level, indexed. For plant running on site, the credit per litre is now more than double what it was in the June quarter.

Always check the current rates on the ATO's fuel tax credit rates page before you lodge. Rates are normally indexed in February and August each year.

Working out the Q1 claim

For the July to September 2026 quarter, fuel splits into two buckets: fuel acquired from 1 July to 2 August, and fuel acquired from 3 August onwards. Each bucket then splits again between off-road plant and heavy vehicles on public roads.

If you claim less than $10,000 a year in fuel tax credits, the ATO lets you use simpler methods. One is to total your litres for the period and use the rate that applies on the last day of the BAS period. For this quarter that's the 3 August rate.

If you claim $10,000 or more a year, you need to apply the right rate to each purchase. The ATO's fuel tax credit calculator does the date split for you if you enter litres by acquisition date.

The records that hold up

Fuel tax credits are a regular ATO review area, and the claim is only as good as the records behind it. Keep:

Fuel purchase records: fuel card statements, supplier invoices or bulk delivery dockets showing litres and dates.
Evidence of how the fuel was used: which plant or vehicle, and whether it was on site or on a public road.
For on-site tanks: a log of what went into the tank and what was drawn out to which machine. Without it, it's hard to show the fuel went into eligible plant.
For heavy vehicles: the vehicle's GVM and evidence it meets the environmental criteria.
Your method: if you apportion between on-road and off-road use, write down how you worked out the split and keep it consistent.

If you claim less than $10,000 a year, simpler record keeping is allowed, such as using fuel card or bank statements. It's still worth keeping the basics.

Mistakes we see most often

1. One rate for the whole quarter. If you claim $10,000 or more a year, applying the 3 August rate to fuel bought in July overclaims, and applying the July rate to everything underclaims.

2. Claiming for light vehicles on the road. Utes and cars under 4.5 tonnes GVM don't get a credit for on-road travel. Fuel cards often bundle these with plant, so make sure they're split out.

3. Treating a truck's whole fuel bill as off-road. A tipper that drives to site on public roads and then runs a PTO on site has two uses. If you claim it all at the off-road rate, the claim is too high.

4. No link between bulk fuel and the machines. A big diesel delivery to a site tank with no record of where it went is the claim the ATO is most likely to question.

5. Forgetting the credit altogether on hired plant. If you buy the fuel for wet or dry hired plant you operate in your business, you may be entitled to the credit. Check the hire terms to see who's buying the fuel.

6. Not checking whether GST and fuel tax credits line up. The litres behind your fuel tax credit claim should reconcile to the fuel purchases in your GST credits. Big gaps are worth explaining before someone else asks.

What to do this week

Pull your fuel card and supplier statements for July, August and September.
Split the litres at 3 August, then between off-road plant and heavy vehicles on public roads.
Take out light vehicle road use.
Run the numbers through the ATO calculator and keep a copy with your BAS working papers.

If you'd also like to tidy up the rest of your quarterly BAS, our Q1 BAS checklist for construction and solar businesses covers GST on progress claims, retentions and payroll.

Need a hand?

TechEdge is a CPA-led outsourced finance team for Australian construction, civil, EPC, solar and renewables businesses. We prepare and review BAS, fuel tax credit claims included, as part of our Financial Controller and Head of Finance engagements.

Email info@techedgeaccounting.com.au or call +61 468 634 973.

This article is general information only and is not financial, tax or legal advice. Rates and rules reflect the ATO's published guidance as at 7 October 2026. Check the ATO website or speak to your adviser about your own circumstances.