For educational purposes only. Not tax, legal, or financial advice. Tax laws change frequently. Consult a registered tax agent or CPA for your specific situation.
The zone tax offset for 2025-26 is $338 (Zone A), $57 (Zone B), or $1,173 (Special Areas), but requires 183 days of actual residence in the zone. FIFO workers whose normal home is outside the zone cannot claim it. Self-employed regional Australians can claim fuel tax credits for eligible off-road and agricultural use, travel deductions for servicing regional territories (88 cents per km in 2025-26), and access federal programs like the $600 million Growing Regions Program for regional business support.
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The zone tax offset compensates residents of remote areas for higher living costs: $338 for Zone A, $57 for Zone B, and $1,173 for Special Areas in 2025-26. But the offset requires 183 days of actual residence, not just working time, which excludes most FIFO and DIDO workers whose normal home is outside the zone. Beyond the offset, regional self-employed Australians access fuel tax credits for off-road use, remote area FBT concessions for housing, primary producer income smoothing tools, and state and federal regional development grants. The compliance challenge is real: unreliable connectivity makes BAS lodgement and Single Touch Payroll reporting difficult in areas still relying on satellite or UHF radio.
The reality this serves
Self-employed Australians living and working in regional, rural, and remote areas. Zone tax offset eligibility, FIFO contractor travel deduction restrictions, remote area FBT concessions, fuel tax credits for off-road and agricultural use, primary producer income averaging, and the practical reality of lodging BAS on unreliable satellite internet. Covers sole traders servicing large regional territories, mining contractors on roster cycles, farmers, and Indigenous community businesses.
Zone tax offset: amounts and eligibility
The zone tax offset under s 79A ITAA 1936 compensates residents of designated remote areas. For 2025-26: Zone A provides a $338 base amount, Zone B provides $57, and Special Areas provide $1,173. An additional loading of 50% (Zone A and Special Areas) or 20% (Zone B) applies if the taxpayer is eligible for relevant dependent tax offsets. To claim, your usual place of residence must be in the designated zone for 183 or more days during 2025-26. Alternatively, you can use a two-year rule: 183 or more days across two consecutive income years (including at least one day in 2025-26) if you did not claim in the first year. The critical limitation is that FIFO and DIDO workers whose normal home is outside the zone cannot claim the offset, even if they spend 183 or more working days at a remote worksite. The offset is based on where you live, not where you work.
Residents of designated remote zones can claim a tax offset of $338 (Zone A), $57 (Zone B), or $1,173 (Special Areas) if they reside in the zone for 183+ days.(ITAA 1936 s 79A)
FIFO contractor travel and accommodation deductions
Self-employed contractors working FIFO arrangements face strict limits on travel and accommodation deductions. Travel from home to a regular FIFO worksite is treated as private commuting and is not deductible, regardless of distance. Accommodation provided at site is considered the regular workplace and is not deductible. Meals at camp or during normal work periods are not deductible. The ATO determines whether a site is your 'regular workplace' based on long-term contract arrangements, roster patterns, and contract specifications, not simply the distance from your home. Deductions may be available for travel between two separate worksites on the same swing, short-term assignments at genuinely temporary locations (not your regular workplace), and accommodation and meals for genuine temporary work travel to a location other than your regular site.
Travel deductions for regional service areas
Self-employed businesses servicing large regional territories can claim substantial travel deductions. Deductible costs include transport (88 cents per km for car travel in 2025-26 or actual costs via logbook method), accommodation when staying overnight for work, and meals using ATO reasonable allowance rates per TD 2025/4 ($33.90 breakfast, $38.10 lunch, $64.95 dinner for high-cost locations, plus $21.80 incidentals per day). A travel diary is mandatory for six or more consecutive nights of work travel. Written evidence is required for all expenses if claiming above the reasonable allowance amounts. Expenses must be directly connected to earning business income, not personal travel with a business component.
ATO reasonable travel allowance rates provide a benchmark for deductible meal and incidental costs during overnight business travel without requiring written evidence for each item.(TD 2025/4 (reasonable travel allowances 2025-26))
Fuel tax credits and off-road use
Businesses using fuel in heavy vehicles, machinery, plant, or equipment for off-road purposes (agriculture, mining, forestry, construction) can claim fuel tax credits to offset some or all of the fuel excise paid. The credit rates vary by fuel type and activity; rates are updated quarterly and published by the ATO. For primary producers, fuel used in tractors, harvesters, irrigation pumps, and other farm machinery qualifies at the full credit rate. Fuel used in light vehicles travelling on public roads does not attract the off-road credit. Claims are made on the quarterly BAS. Records must show the quantity of eligible fuel purchased, the purpose of use, and the relevant credit rate. For regional sole traders with high off-road fuel consumption (farmers, earthmovers, forestry contractors), fuel tax credits can represent a material cash-flow benefit each quarter.
Fuel tax credits reimburse fuel excise for eligible off-road business use. Rates are updated quarterly and claimed via BAS.(Fuel Tax Act 2006; ATO fuel tax credit rates)
Allowable expenses in context
Regional and remote sole traders claim deductions under standard rules (ITAA 1997 s 8-1) but the profile of expenses differs from urban operators. Vehicle travel: logbook method or cents-per-kilometre (88 cents per km, capped at 5,000 business km). Regional businesses servicing large territories will almost always benefit from the logbook method given the distances involved. Overnight travel: accommodation, meals at ATO reasonable allowance rates (TD 2025/4), and incidentals when travelling for business within the service territory. Travel diary mandatory for 6+ consecutive nights. Fuel tax credits: claim via BAS for eligible off-road fuel use in farm machinery, heavy equipment, and plant. Does not apply to light vehicle on-road use. Satellite internet and communication: deductible in proportion to business use. For businesses in areas relying on satellite (Starlink, nbn Sky Muster), the full cost may be predominantly business if there are no alternative connectivity options for BAS lodgement and STP reporting. Generator and power costs: deductible where used to power business premises or equipment in off-grid or unreliable-grid locations. Primary producer specific: fodder storage, water infrastructure depreciation, fencing (capital works deduction over the effective life), and land care expenses (immediate deduction under Landcare provisions). NOT deductible: personal commuting from home to a regular FIFO worksite (treated as private travel regardless of distance), meals at a regular workplace camp, personal living costs in a remote location, and the social or lifestyle costs of living remotely.
Support schemes
Growing Regions Program
Eligibility: Regional and remote communities and organisations. $600 million federal funding extended to 29 February 2028. Projects must benefit regional areas and meet program guidelines.
Farm Management Deposits (FMDs)
Eligibility: Primary producers with non-primary-production income of $100,000 or less. Deposits are deductible in the year made and assessable in the year withdrawn.
Remote area FBT concessions (for employers in remote areas)
Eligibility: Employers providing housing, holiday transport, or housing loans to employees in remote areas. Remote area defined as at least 40 km from a town of 14,000+ population AND 100 km+ from a town of 130,000+ (based on 1981 Census figures).
Frequently asked questions
Can I claim the zone tax offset if I work FIFO but live in the city?+
No. The zone tax offset requires your usual place of residence to be in the designated zone for 183 or more days during the income year. If your normal home is in Perth, Brisbane, or any location outside the zone, you cannot claim the offset even if you spend 183 or more working days at a remote site. The offset compensates for the cost of living remotely, not the cost of working remotely. If you genuinely relocate your usual residence into the zone (move your family, change your address, live there when not on roster), you can claim.
Are meals at a FIFO camp site deductible?+
Generally no. Meals at a regular FIFO worksite camp are treated as personal living expenses, not business travel. The ATO considers your camp your regular workplace, not a temporary work location. Meals become deductible only when you are travelling to a genuinely temporary or different work location (not your regular roster site), staying overnight away from both your home and your regular workplace, and the travel is directly connected to earning income. The weeks-on/weeks-off roster pattern does not convert a regular site into a temporary one.
How do fuel tax credits work for farmers and off-road use?+
Fuel tax credits reimburse some or all of the fuel excise paid on fuel used in eligible off-road business activities. Farmers can claim for diesel used in tractors, harvesters, irrigation pumps, generators, and other machinery. The credit rates vary by fuel type and activity and are updated quarterly by the ATO. Claims are made on the quarterly BAS using the quantity of eligible fuel purchased multiplied by the applicable rate. You must keep records of fuel purchases (invoices showing litres and price) and be able to demonstrate the fuel was used for an eligible purpose. Light vehicle fuel used on public roads does not qualify for the off-road credit.
What happens when unreliable internet prevents me from lodging BAS on time?+
The ATO has general remission powers for penalties and interest caused by circumstances beyond the taxpayer's control. If unreliable satellite internet or a connectivity outage prevents timely BAS lodgement, contact the ATO (13 28 66 for business) before the due date to request an extension or note the circumstances. Lodge as soon as connectivity is restored. Keep records of the outage (provider notifications, service logs). A BAS agent can also help by receiving extended lodgement deadlines (two to four weeks beyond standard due dates) and managing lodgement from a location with reliable connectivity. For STP reporting, the ATO allows quarterly reporting for small employers (under 20 employees) and deferrals for employers experiencing genuine connectivity barriers in remote areas.