What is the work-related car expense deduction in Australia?

Work-Related Car Expense Deductions in Australia

You can claim a tax deduction for work-related car expenses, but only for the work-related portion of your driving. The Australian Taxation Office (ATO) allows two methods to calculate your deduction.

Method 1: Cents Per Kilometre

This is the simpler method for most people. You claim a set rate per kilometre for work-related driving.

• Current rate: 67 cents per kilometre (2023-24 tax year)
• Maximum claim: 5,000 work-related kilometres per year
• You must keep a logbook for 12 weeks to establish your work-related percentage
• After that, you can claim based on your actual work kilometres

Method 2: Actual Expenses

You can claim the actual costs of running your vehicle, but only for the work-related portion.

• Claimable expenses include: fuel, maintenance, repairs, registration, insurance, and depreciation
• You must keep detailed records and receipts
• You need a logbook showing work-related kilometres for the entire income year
• Calculate the work-related percentage and claim that portion of total expenses

Important Rules

• You cannot claim deductions for commuting between home and your regular workplace
• You can claim for driving between multiple work locations on the same day
• You can claim for driving to client meetings or work-related appointments
• Keep detailed records: logbook, receipts, and odometer readings
• The cents per kilometre method is generally easier and doesn't require receipts

Getting Help

Visit the ATO's vehicle and travel expenses page for detailed guidance, logbook templates, and examples.

If you're unsure which method suits you, consider speaking with a tax accountant or using the ATO's online resources.

This is general information only. Check official sources before acting.