Key Takeaways

• FBT on company vehicles is calculated via the statutory formula method (a flat 20% of the vehicle’s base value) or the operating cost method, which needs a 12-week logbook.
• Since 1 April 2025, PHEVs no longer qualify for the FBT exemption, though fully electric and hydrogen fuel-cell vehicles still do.
• The ATO requires records to be kept for five years, covering fuel, logbook and vehicle expenses across BAS, GST, fuel tax credits and FBT.
• Eligible heavy vehicles can claim fuel tax credits for business fuel use, with accurate records needed to substantiate claims.
• Fuel cards capture itemised transaction data (date, litres, odometer, registration) that helps meet ATO substantiation requirements without manual entry.

How Fuel Cards Help with Taxation

Managing a fleet means a lot of admin, and it stacks up fast at tax time. Fuel expenses need tracking, documentation has to be kept in order, and everything has to line up with Australian Taxation Office (ATO) requirements. Fuel cards take a lot of that manual work off your plate while keeping the detailed records the ATO expects.

WEX Motorpass fuel cards are built for Australian fleets that need to stay on top of ATO record-keeping. Every transaction is captured digitally with the date, location, fuel type, quantity and cost, giving you audit-ready records for BAS, GST and fuel tax credit reporting without chasing paper receipts. 

Understanding Your BAS Reporting Obligations

If your business is registered for GST, you generally report your GST obligations through a Business Activity Statement (BAS). Depending on your circumstances, your BAS may also include other tax obligations, such as PAYG instalments, PAYG withholding and fuel tax credits.

For businesses that manage vehicles, fuel purchases can form a significant part of the expenses that need to be tracked and reconciled. Keeping accurate records of these purchases can help you meet your tax and reporting obligations.

For each fuel transaction, businesses may need to retain information such as the date of purchase, amount paid, supplier and GST component. When you have multiple vehicles or drivers making regular fuel purchases, keeping track of this information manually can quickly become time-consuming.

Good record keeping can make BAS preparation easier by giving you the information you need to reconcile business expenses and GST. This is where fuel card reporting can help by bringing fuel transactions together in one place.

How do Fuel Cards Help with BAS & GST Reporting?

Fuel cards can simplify the process of tracking and reconciling fuel expenses by creating a digital record of transactions each time a driver refuels.

Depending on the fuel card provider and the report available, transaction data can include details such as:

• Date and time of purchase
• Fuel type
• Litres purchased
• Amount spent
• GST amount
• Vehicle or card details
• Location of the transaction

Having this information consolidated in fuel card reports can reduce the need to collect and manually enter individual paper receipts. It can also make it easier to review fuel expenditure and identify the GST component of eligible business purchases when preparing your BAS.

WEX Motorpass provides statements, transaction data and annual and quarterly activity reports through the Online Service Centre. Reports can provide information such as fuel spend, litres purchased and GST, helping businesses keep track of their vehicle expenses and simplify their tax reporting.

Fuel card reporting doesn’t replace your business’s tax or record-keeping obligations, but it can make the process of maintaining and accessing the information you need significantly simpler.

Are fuel cards tax deductible?

A fuel card itself is not necessarily a tax deduction. Instead, eligible business fuel and vehicle expenses may be deductible depending on your business structure, how the vehicle is used and the applicable tax rules.

A fuel card can make it easier to keep track of those expenses by providing an itemised record of fuel purchases. This can reduce the need to collect individual receipts and make it easier to substantiate business expenses at tax time.

If you’re registered for GST, the GST component of eligible business purchases may also be relevant to your BAS and input tax credit claims, provided the relevant requirements are met.

Your business’s specific tax treatment will depend on your circumstances, so it’s important to speak with your accountant or tax adviser if you’re unsure what you can claim.

The FBT Challenge for Fleet Operators

Fringe Benefits Tax deserves particular attention because it directly impacts how you manage company vehicles. When you provide a vehicle to an employee and they use it for private purposes, this constitutes a fringe benefit. The ATO expects you to pay FBT on the taxable value of this benefit.

FBT is generally calculated using either the statutory formula method or the operating cost method. The method used can affect how vehicle running costs, including fuel, are treated when calculating the taxable value of the benefit.

Calculating company car tax requires choosing between two methods: 

Which method produces the lower company car tax bill depends on how the vehicle is actually used, so it is worth comparing both before you decide.

FBT Exemptions Worth Knowing

Not every vehicle benefit attracts FBT.  The ATO sets out exemptions for specific circumstances. Where a commercial vehicle is genuinely not available for private use, an FBT exemption may apply. The eligibility rules are set by the ATO, so it is worth confirming your position with your tax adviser.

Electric vehicles have received favourable treatment recently. From 1 April 2025, plug-in hybrid electric vehicles (PHEVs) stopped qualifying for the FBT electric car exemption, though eligible fully electric and hydrogen fuel-cell vehicles remain exempt. Vehicles under a binding financial commitment entered into before that date may continue to qualify until the commitment ends. The ATO’s Practical Compliance Guideline PCG 2024/2 also sets a shortcut rate for valuing home charging of electric vehicles.

However, even exempt vehicles remain reportable for Reportable Fringe Benefit Amount (RFBA) purposes, meaning you still need to track and report them on employee payment summaries.

FBT Logbook Requirements

If you use the operating cost method, a valid FBT logbook is what substantiates your business-use percentage. It must run for a continuous period of at least 12 weeks, and that period has to be representative of how the vehicle is normally used. A stretch that happens to include a block of annual leave, for instance, will understate business use. 

For each trip you record the date, the start and finish odometer readings, the kilometres travelled and the purpose; the ATO has been clear that a bare note like ‘business use’ is not enough. Once kept, a logbook is generally valid for five years, so it does not need repeating every year, but if the vehicle’s usage pattern changes materially a new one is required before the five years are up. You also record the odometer reading at the start and end of each FBT year.

Common FBT Pitfalls

The ATO has highlighted several areas of concern for FBT company car compliance. Many businesses incorrectly classify vehicles as ‘non-cars’ (utes, vans, or trucks) to access exemptions without properly substantiating that private use is minimal or non-existent. The tax office specifically warns against applying exemptions without analysing and documenting the actual private usage patterns.

Another frequent mistake is letting the logbook lapse. Businesses start one but stop recording the detail or keep relying on it after usage has shifted enough to make it unrepresentative.

Can Fuel Cards help with FBT?

For FBT reporting, fuel cards provide crucial data that supports your chosen calculation method. If you’re using the operating cost method, fuel card records feed into the total operating costs used in that calculation. Combined with odometer readings from your FBT logbook, they help you work out the proportion of business versus private use.

The detailed transaction history also helps identify patterns that might indicate private use. Refuelling on weekends or in locations unrelated to business activities becomes visible in the data, helping you maintain accurate records should the ATO conduct a review.

Some businesses use fuel card data alongside GPS telematics to build comprehensive logbooks. Whilst the ATO hasn’t fully endorsed electronic logbooks as replacements for traditional paper versions in all circumstances, the combination of fuel card transactions and GPS data creates robust documentation of vehicle usage.

Do Fuel Cards Help with ATO Record Keeping?

The ATO mandates that businesses retain records for five years. For fuel expenses, this means keeping evidence of every transaction, including the business purpose. Fuel cards excel here because they create permanent digital records that won’t fade like thermal receipts or get lost in filing cabinets.

During an ATO audit, you’ll need to demonstrate that claimed expenses are legitimate business costs. Fuel card systems let you add vehicle registration numbers or driver identifiers to each transaction, creating clear links between specific vehicles, drivers, and fuel purchases. This level of detail satisfies ATO scrutiny far more effectively than a shoebox of crumpled receipts.

The digital records also support your position if you’re claiming that a vehicle is used exclusively for business purposes. Consistent refuelling patterns at business locations during business hours, combined with other operational records, help substantiate your claims.

Sole traders and contractors: tracking fuel for your tax return

If you are a sole trader or contractor rather than an employer, FBT usually will not apply to a vehicle you own and use in your own business, because FBT is an employer obligation. Instead you claim your car expenses as a deduction in your income tax return, using either the cents-per-kilometre method or the logbook method. 

The logbook method works much like the FBT version: a continuous 12-week logbook sets your business-use percentage, which you apply to your running costs, fuel included. A fuel card helps here the same way it does for a fleet, because every litre is captured with the date, location and amount, so the fuel figures behind your claim are already itemised and easy to substantiate if the ATO reviews them. Which method leaves you better off depends on your circumstances, so it is worth comparing the two or checking with your tax agent.

Streamline Your Tax Compliance with WEX Motorpass

Motorpass fuel cards are specifically designed to meet Australian fleet operators’ needs for ATO compliance. Our platform automatically captures every transaction detail required for BAS reporting, creating audit-ready records that satisfy ATO record-keeping requirements.

You’ll receive detailed reporting that separates GST, tracks fuel tax credit eligibility, and provides the transaction history needed for FBT calculations. Transaction data can be exported for use in your accounting software, cutting down on double-handling and the time spent on tax preparation.

Our cards work at thousands of fuel locations across Australia, ensuring your drivers have access wherever their work takes them whilst you maintain complete oversight and control. Real-time alerts notify you of unusual transactions, helping prevent unauthorised use that could complicate your FBT position.

Ready to simplify your fleet tax compliance? 

With WEX Motorpass, detailed fuel transaction records can help turn BAS reporting from a quarterly headache into a more streamlined process. Spend less time managing paperwork and more time focusing on your business.

FAQs

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.

Copyright ©2026 WEX Inc. All rights reserved. The information in this document is subject to change without notice.