The financial support is not means tests, is tax-free and will be capped at $6000.

Self-employed volunteers who can demonstrate a loss of income, and volunteers employed by small and medium businesses who can demonstrate loss of income, are eligible if they are deployed to respond to bushfires for more than 10 days.

The scheme will be fully funded by the Commonwealth and administered by the Tasmanian government from the end of January.

Premier Will Hodgman said it was known from previous fire seasons fighting bushfires comes at a considerable personal cost for volunteers.

"It's really about, not only recognising the extraordinary work these most dedicated people do, but that they do suffer some financial stress and loss as a result of doing so," Mr Hodgman said.

Tasmanian Liberal senator Jonathon Duniam said the funding would support volunteers who were risking their lives to protect others.

"While we know our volunteers don't seek payment for their service, this support will help to insulate them from financial loss while appropriately recognising the risks they are facing to protect communities from these devastating fires," Senator Duniam said.

Tasmania Fire Service chief officer Chris Arnol said he suspected the announcement would be met with fixed feelings.

"Volunteers don't do it to make money but this is relief for firefighters that commit an enormous amount to the firefighting effort," Mr Arnol said.

"From that point of view it's a very good move to support our firefighters."