Claiming car expenses: cents per kilometre vs logbook

If you use your own car for work, you may be able to claim a deduction. There are two methods for cars, and choosing the right one can make a meaningful difference.

Which trips count

Work-related trips include travelling between two workplaces, visiting clients, attending meetings away from your usual workplace, and carrying bulky tools or equipment needed for work.

Normal trips between home and your regular workplace are generally private, even if you take a work call on the way or there is no public transport. This is one of the most common errors the ATO sees.

Cents per kilometre method

• Claim a set rate for each work kilometre, up to a maximum of 5,000 kilometres per car
• The ATO sets the rate each year, and it covers all running costs including fuel, servicing, insurance and depreciation
• You do not need written receipts, but you must be able to show how you worked out your kilometres, such as a diary of work trips

This method suits people with fewer work kilometres who want simple record keeping.

Logbook method

• Claim the business-use percentage of your actual car expenses, including fuel, servicing, registration, insurance, interest and depreciation
• Keep a logbook for at least 12 continuous weeks that represents your usual travel
• A valid logbook can be used for up to five years, provided your work travel pattern does not change significantly
• Record odometer readings at the start and end of each year, and keep receipts for expenses (fuel can be estimated from odometer records)

The logbook method usually gives a larger deduction for people who drive a lot for work or have higher car costs.

Common mistakes

• Claiming home to work travel
• Claiming more than 5,000 kilometres under the cents per kilometre method
• Claiming expenses your employer has reimbursed
• Using a logbook that does not reflect the current year's travel

We check car claims and compare both methods as part of every individual tax return.