Most tradies think of the ute as a fixed cost that already happened. It is neither fixed nor finished — and it is a bigger line than almost anyone budgets for.
What a work ute actually costs
| Component | Annual | Notes |
|---|---|---|
| Finance or depreciation | $9,000 | Use real resale, not the tax schedule |
| Insurance and registration | $3,200 | Commercial use, tools cover |
| Fuel (25,000km @ 12L/100km) | $6,150 | At ~$2.05/L |
| Servicing, tyres, repairs | $2,800 | |
| Total | ≈ $21,150 | ~85c per kilometre |
Across a five-ute operation that is $105,750 a year — comparable to a full-time employee, and rarely reviewed with the same scrutiny.
The excise change
Fuel excise returned to the full indexed rate of 53.7c/L on 3 August 2026.
| Period | Rate |
|---|---|
| Before 1 April 2026 | 52.6c/L |
| 1 Apr – 30 Jun 2026 | 20.6c/L |
| 1 Jul – 2 Aug 2026 | 36.6c/L |
| From 3 Aug 2026 | 53.7c/L |
That is a 17.1c/L step-up from July — about $513 a year per ute, or $2,565 across five. The restored rate also sits above the pre-crisis 52.6c baseline, because excise is indexed.
Fuel tax credits generally do not apply to light vehicles travelling on public roads. They may apply to off-road use and to plant. Confirm your entitlement rather than assuming.
What you can claim
Logbook method. Twelve consecutive weeks of records establishes a business-use percentage valid for five years. Claim that percentage of all actual costs — fuel, servicing, insurance, registration, depreciation, interest.
Cents per kilometre. Simpler, capped at 5,000 business kilometres a year. For most trade businesses the logbook method returns substantially more.
Instant asset write-off. The $20,000 threshold for businesses under $10m turnover was announced in the May 2026 Budget. Confirm the current legislated position with the ATO before timing a purchase on it — the statutory default is $1,000 and the difference is the difference between an immediate deduction and years of depreciation.
Vehicles designed to carry one tonne or more are generally not subject to the car limit for depreciation — relevant for most work utes and a meaningful difference.
Where trade businesses lose money on vehicles
Not charging travel. Six hours a week of driving between jobs is 13% of working time. Build it into the rate or charge a call-out fee.
Buying too much ute. The dual-cab with every option costs $18,000 more than the working vehicle and does the same job. That is $3,600 a year of depreciation buying nothing billable.
Deferring servicing. A skipped service is a saving this quarter and a repair bill next year.
Not tracking fuel by vehicle. Fuel cards give you per-vehicle data. A ute running 40% above the fleet average is either a mechanical problem or a driving problem, and both are fixable once visible.
Keeping vehicles past the crossover. There is a point where rising maintenance exceeds the depreciation you avoid by not replacing. Most trade businesses hold too long because replacement feels like a cost and maintenance feels like normal.
What to do
- Recalculate your cost per kilometre with current fuel prices, not last year’s.
- Check your charge-out rate covers it. → Trades charge-out rates
- Start a logbook if you do not have a current one.
- Introduce a call-out or travel charge if you are absorbing travel.
- Reprice, anchored to something verifiable — excise returned to 53.7c on 3 August, award rates rose 4.75% on 1 July.
Where to go next
- Trades Charge-Out Rates\n- Fuel Excise Cost Calculator\n- Fuel Excise Is Back at 53.7c\n- How to Raise Prices Without Losing Customers
Sources: Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts; Australian Taxation Office; Fair Work Commission Annual Wage Review 2026. Cost figures illustrative. Confirm deduction and instant asset write-off positions with your accountant.