Motor Vehicle Expenses
Claiming Motor Vehicle Expenses
If you use your car for work or business purposes, you may be able to claim a tax deduction using either the cents per kilometre method or the logbook method.
Travel between home and your usual workplace is generally private and cannot be claimed. Different rules may apply where you travel between workplaces, visit clients, carry bulky equipment or work from alternative locations.
Cents per Kilometre Method
Under this method, you can claim a set rate for each eligible work or business kilometre travelled, up to a maximum of 5,000 kilometres per car each year.
The applicable rates are:
88 cents per kilometre for the 2025–26 financial year
91 cents per kilometre for the 2026–27 financial year
The maximum deductions are therefore $4,400 for 2025–26 and $4,550 for 2026–27.
The rate covers all car expenses, including fuel, registration, insurance, servicing, repairs and depreciation. These costs cannot be claimed separately when using this method.
You do not need receipts for each car expense, but you must be able to show how you calculated your work-related kilometres. A diary, calendar, appointment records or records of regular work trips can help support the claim.
Simply claiming 5,000 kilometres without a reasonable basis is not sufficient.
Logbook Method
The logbook method allows you to claim the work or business-use percentage of your actual car expenses.
You must keep a logbook for a continuous period of at least 12 weeks. The logbook should record all trips during that period, including both private and work-related travel, and show:
The date of each trip
The odometer readings at the beginning and end
The kilometres travelled
The reason for the journey
The logbook is used to calculate the percentage of the car’s use that relates to earning assessable income.
For example, if a valid logbook establishes 80% work-related use, you may generally claim 80% of eligible expenses such as:
Fuel and oil
Registration
Insurance
Servicing and repairs
Interest on finance
Lease payments
Depreciation
Receipts and other records must be kept to support the expenses claimed. Principal repayments on a car loan are not deductible.
A logbook can generally be used for up to five years, provided it continues to represent your normal travel pattern. A new logbook may be required if your circumstances or level of work-related use changes substantially.
The best method depends on how much work-related travel you undertake, the cost of operating the vehicle and the records you have kept. We can determine which method provides the best available deduction when preparing your tax return.
