Soil erosion removes the fine, soil organic carbon (C)- and nutrient-rich material from the topsoil into water courses and into the atmosphere. Soil erosion is omitted from Australian C accounting (FullCAM) and neglected in agricultural production models (e.g., APSIM). Consequently, these models assume that C stock change is due solely to the balance between net primary production and heterotrophic respiration. We fitted the Rothamsted C cycling model (RothC), using the established decomposition rates for Australia, to the long-term C measurements of 103 agricultural plots from 26 distinct locations and estimated the net C flux. We modified RothC to account for erosion of soil C and repeated the model fit with the same decomposition rates and estimated the net C flux. We found that erosion accounted for an average net C flux of 0.24 tC ha^-1 y^-1. Assuming that these results represent the 26.2 Mha of Australian cropland, the total erosional C flux was 6.2 TgC y^-1 which suggests a large under-estimation of the National Greenhouse Gas Inventory from this account (4.2 TgC y^-1; 2011). Furthermore, previously established potential C sequestration in Australian cropland (15 TgC y^-1) is likely over-estimated by around 60%. Soil organic carbon erosion must be included in C cycling and crop production models for successful reduction in CO₂ emission and reliable mitigation and adaptation of agricultural systems to a changing climate