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The car logbook method is a good way to track your car expenses and claim them on your tax return. This can boost your tax refund, but you need to keep a car logbook.
Key Takeaways
- The logbook method lets you claim the work-related share of your actual car costs, not just a flat rate.
- A 12-week logbook can cover you for up to five tax returns.
- If you drive a lot for work, this method usually beats cents per kilometre.
- You’ll still need receipts to back up whatever you claim.
- Scroll down for a free logbook template to get started today.
If you use your car for work purposes, the ATO lets you claim some car-related expenses on your tax return. Don’t have a logbook? We’ve got a free logbook template below you can use instead!
Logbook method vs cents per kilometre: which one is right for you?
If you use your car a lot for work (more than 5,000km annually), the car logbook method will get you a bigger tax refund than the cents per kilometre method.
This is because a logbook lets you claim a percentage of all your car costs, including fuel, registration, maintenance and loan interest.
The other method, cents per kilometre, only lets you claim a set rate for up to 5,000 km. Any kilometres or costs above this limit are lost deductions you can’t claim.
Note: If you already know how the logbook method works and just need the logbook template, scroll down to it below.
How does the logbook method work?
When you use the logbook method, you record every trip in your vehicle (both private and work-related) for a 12-week period. You then use the logbook to calculate your “business use percentage” for the year.
Your business use percentage is the percentage of kilometres you travel in your car for work-related purposes. It’s also the percentage of all your car expenses you paid during the year that you can claim on your return.
By keeping a car logbook, it’s easy to calculate your business use percentage and provide the evidence the ATO requires.
It’s important to record every trip for 12 weeks, not just work trips. If you don’t do this, the ATO will consider your logbook invalid and may reject your car expense claims.
How long is my car log book valid for?
Although it takes a bit of patience to get going, you only need to do a logbook once every 5 years. As long as your driving habits remain consistent each year, you can use that logbook for five years’ worth of tax returns.
Even if you get a new car during that 5-year period, you can continue to use the old logbook if your work-related use hasn’t changed.
Important yearly requirement: While the logbook is valid for 5 years, the ATO does still require you to record your odometer reading at the start and end of each financial year.
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Free car log book template
Download a car logbook for free
A car logbook helps you get the most from your work-related vehicle use. Download this free car logbook template so you can keep track of each business trip you take.
How to complete your car logbook template
To work out your business use percentage, you need to keep a logbook for a “typical” 12-week period, making sure it is 12 consecutive weeks.
Your logbook must include every trip you take, not just your work-related trips.
The logbook must include the following details:
- date for each journey
- start and finish times for each journey
- start and finish odometer readings for each journey
- total number of kilometres for each journey
- reason for each journey
- start and finish dates for the logbook period
- start and finish odometer readings for the logbook period
- total number of kilometres travelled during the period
- business use percentage for the period
Does the logbook method sound like a lot of effort?
It’s easier than it sounds:
- You only do it once every five years.
- Each entry only takes 30 seconds and you’ll be glad you did it when you see a bigger refund at tax time!
Etax Tip: : Don’t start your logbook if you have holidays coming up in the next 12 weeks. You’ll end up recording fewer work-related kilometres than usual and your refund won’t be as big. You can also use a digital spreadsheet or logbook app to keep your records in digital form!
If you would like help to make sure you fill out your logbook correctly, don’t hesitate to get in touch with us via Live Chat or Secure Messages from within your Etax account.
How to calculate your business use percentage
Once you’ve completed your 12-week logbook, you’ll be able to calculate your car’s business use percentage.
To do this, divide your business use kilometres by your total kilometres, then multiply by 100.
For example, if you travel 4,000 kilometres in total for the 12-week period, and 2,200 were for work-related purposes, you’d calculate it like this:
2,200 ÷ 4,000 × 100 = 55%
In this example, your car’s business use percentage would be 55%. This means that you could claim 55% of all your vehicle expenses for the financial year.
What sort of vehicle expenses can you claim with the logbook method?
One of the greatest benefits of the logbook method is that you can claim more than just a fixed rate, unlike the cents per kilometre method.
What counts as a “vehicle expense” with the logbook method?
Vehicle expenses include:
- running costs such as fuel, oil and servicing
- registration
- insurance
- vehicle depreciation
Vehicle expenses do not include:
- the purchase cost of the car
- parking tickets, speeding fines and other penalties
Remember: record, record, record!
Of course, it’s not just the logbook records you need to keep to maximise your car expenses claim. You must also keep written evidence, such as receipts, for your running costs, registration and insurance. Depreciation is calculated separately and doesn’t need a receipt.
Always remember: Your car expense claims cannot be guessed or made-up. They must be legitimate, and you must have evidence of them. If you stick to the rules and use the logbook method for claiming your car expenses, you can maximise your tax refund without worrying about the ATO becoming a back seat driver.
Other posts on tax deductions:
- Can I Claim My Car Expenses Without a Logbook?
- Can you claim your work uniform as a tax deduction?
- Claiming Self Education Expenses as Tax Deductions
- Ironing out laundry expenses
- Assessing your expenses claims when travelling for work
Frequently asked questions
You need to keep a car logbook for 12 continuous weeks. During that time, record every trip, including private and work-related travel.
You can usually use a valid car logbook for up to five years, as long as your work-related driving pattern stays much the same.
Yes. You need to record all trips during the 12-week period, not just work trips. This helps you calculate your correct business-use percentage.
You may be able to claim the work-related percentage of expenses such as fuel, servicing, registration, insurance, repairs and depreciation.
It depends on how much you use your car for work. The logbook method may give you a larger deduction if you drive often for work or have high car expenses.
Yes, you may be able to use the cents per kilometre method instead. However, that method only lets you claim up to 5,000 business kilometres per year.
No, as long as your work-related driving pattern stays the same, you can keep using your existing logbook until it expires after five years, even with a different car.
Yes. You can keep your logbook in an app or spreadsheet instead of on paper, as long as it records the date, odometer readings, kilometres and reason for each trip.
