Almost every freight invoice in Australia carries a fuel levy, sometimes called a fuel surcharge. It is a percentage added to the freight charge that rises and falls with the price of diesel. This guide explains why carriers use it, how it is calculated, and how to check it.
Why carriers charge a fuel levy
Fuel is one of the largest costs in running trucks and vans, and its price changes week to week. Rather than rewriting every rate card when diesel moves, carriers keep their base rates fixed and add a levy that follows the fuel price. When fuel goes up, the levy goes up. When fuel falls, the levy falls.
For senders this is fairer than the alternative: carriers padding their base rates to cover the worst case.
The standard formula
Most carriers use a version of this formula:
Fuel levy % = (current fuel price − base fuel price) ÷ base fuel price × fuel share of running costs
- Base fuel price: the fuel price built into the carrier’s base rates. Below this price, no levy applies.
- Current fuel price: usually an average pump or terminal gate price over a set period, such as the previous week or month.
- Fuel share: the portion of the carrier’s running costs that is fuel. For road freight this is commonly between 25% and 35%.
A worked example
Say a carrier’s base fuel price is $1.50 a litre, diesel now averages $1.95, and fuel is 30% of running costs.
- The price has risen by $0.45, which is 30% above the base ($0.45 ÷ $1.50).
- Fuel is 30% of costs, so the levy is 30% × 30% = 9%.
- On a $200 freight charge, the levy is $18.
These figures are an example only. Use the fuel levy calculator to try your own.
Where the fuel tax credit fits in
Businesses running heavy vehicles (over 4.5 tonnes gross vehicle mass) on public roads can claim a fuel tax credit from the ATO for each litre of diesel. Some carriers deduct this credit from both the base and current prices before calculating the levy, which lowers the levy for the customer. Vans under 4.5 tonnes generally cannot claim the credit on public roads.
The credit rate changes, usually each February and August. Check the current rate on the ATO fuel tax credit rates page.
How to check your fuel levy
- Ask your carrier for its base fuel price, the fuel share it uses and which price source it follows.
- Check how often the levy is reviewed: weekly, fortnightly or monthly.
- Confirm whether the levy applies to the freight charge only, or to extras such as tailgates and waiting time as well.
- Run the figures through the calculator. If the result is very different, ask why.
How we handle fuel levies
We keep our base rates fixed and review the fuel levy regularly against published Queensland fuel prices, so it moves down as well as up. Your levy is shown on every quote and invoice. Ask us if you would like the details for your account.
Published by All Freight Carrying, Yandina, Sunshine Coast · 21 October 2026 · Last updated 25 October 2026
