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If you use your car for work-related travel, other than commuting to and from work, it’s likely that you can claim your car expenses on your tax return.
Key Takeaways
- If you drive for work (beyond your daily commute), you may be able to claim deductions for car expenses on your tax return.
- There are two methods: the cents per kilometre method and the logbook method
- The cents per kilometre method is simpler and requires no receipts but is capped at 5,000 km per year.
- The logbook method can deliver a much larger deduction if your work-related driving is significant.
Work-related car deductions are very common, easy to claim, and will boost your refund.
What car expenses can I claim?
The ATO states that you can claim car expenses if you:
- Travel for work during the day or night (other than your regular commute)
- Drive to work-related conferences or meetings that aren’t held at your usual place of work.
- Travel between two places of employment if neither of them is your home.
- Drive from your usual workplace to a different workplace, then back.
- Drive from home to an alternate workplace and then on to your usual workplace, or directly home.
- Regularly work at more than one site each day, driving between them before driving home.
- Transport bulky or heavy tools or equipment that cannot be safely stored at your workplace (this does not include things like laptops or stationery).
When you can’t claim a tax deduction for car expenses:
- You can’t claim car expenses for travel between home and work or vice versa, even if you live a long way from your work.
- You can’t claim car expenses on your tax return that your employer has already reimbursed.
The two methods for claiming car deductions
There are two methods to calculate car expense claims on your tax return:
- Cents per km method, or
- Car logbook method
Which car tax deduction method is best for me?
Claiming car expenses correctly can seriously increase your refund at tax time, so it’s important to know which method is best for you.
Claiming car expenses: Cents Per Km method
How does the cents per kilometre method work?
- Claim up to 5,000km per year
- No logbook required
- The ATO can ask you to explain how you calculated your claim and confirm the use of your car was work-related
- The rate you can claim depends on the tax year. Check the table below for the rates
Cent per km rates
| Tax Year | Rate |
| 2026 – 27 | 91 cents per km |
| 2025 – 26 | 88 cents per km |
| 2024 – 25 | 88 cents per km |
| 2023 – 24 | 85 cents per km |
| 2022 – 23 | 78 cents per km |
Example: Julie is an administration officer for a small business. In the 2026/27 tax year (July 2026 to June 2027) she does four trips per day in her car to collect/drop off deliveries and do the banking. She drives approximately 14km per day in work-related travel.
Therefore, Julie can claim:
- 14km X 5 days = 70km p/week
- 70km per week X 48 weeks (Julie has four weeks’ leave each year) = 3,360km
- 3,360km X $0.91 = $3,057.60[AD1]
This means at the car expenses section of her tax return, Julie can claim a car expenses deduction of $3,057.60.
NOTE: This method covers all car-related expenses, including insurance, registration, annual repairs, maintenance, and fuel costs. Remember, you can’t add these expenses on top of the cents per kilometre total when working out your deduction.
Claiming car expenses: Logbook method
We’ve got a detailed article about the car logbook method so we’ll just cover the basics here:
How it works:
- Keep a logbook for 12 continuous weeks
- You must own the car
- A completed logbook is valid for 5 years as long as your pattern of use remains consistent and you record an odometer reading at the start of each income year
- If you get a new job or your amount of driving changes, a new 12-week logbook is required
- Record all business and personal trips in your car logbook
- Keep receipts or evidence for all expenses related to your car, including:
- Petrol
- Registration
- Insurance
- Servicing
- Interest on loan costs
- Depreciation
- Other running costs
Once you complete your logbook, you can calculate your business-use percentage ( the percentage split between work and personal driving). Then, you can claim the business percentage of all expenses related to your car.
Example: Jeff is a sales manager and uses his car for work. He kept a logbook for 12 weeks recording both work and personal trips, which totalled 1,000 km. Of this, Jeff added up 850 km travelled on work-related trips. He then divided his work kilometres by total kilometres to calculate his work-related percentage.
- 850km divided by 1,000km = 85%
Jeff adds up the receipts for all his car expenses for the year, which total $8,350. Then multiplies that by his work-related percentage, 85%.
- $8350 x 85% = $7,097.50
Jeff can claim $7,097.50 worth of deductions in the car expenses section of his tax return.
Free car logbook template
Download a free car logbook template
NOTE: If you claim car expenses for more than one car, you don’t need to use the same method for both cars.
What if I use a motorbike or a van for work-related travel?
There are different rules for vehicles such as:
- Motorbikes
- Utes, trucks or vans with a carrying capacity of a tonne or above
- A minivan capable of carrying nine or more passengers
As with car expenses, you keep a logbook as well as records of all associated costs of running the vehicle. You claim these expenses in the travel expenses section of your tax return.
If you’re not sure which method is best for you, don’t hesitate to reach out via Live Chat within your Etax account, call us on 1300 693 829 or send us an email to: [email protected].
No. The daily commute between home and your regular workplace is not claimable, regardless of the distance. However, if you travel from home to an alternative worksite first, that portion may be claimable.
No. The cents per kilometre method does not require receipts. However, the ATO may ask you to explain how you calculated your claim and why the travel was work-related, so it’s a good idea to keep a basic record of your trips.
You can claim up to 5,000 work-related kilometres per year using this method. For 2025–26, the rate is 88 cents per kilometre and in 2026–27 the rate is 91 cents per kilometre.
A completed logbook is valid for five years, provided your driving pattern stays consistent and you record your odometer reading at the start of each year. If your job changes or your work-related driving increases or decreases significantly, you’ll need to complete a new 12-week logbook.
Yes. If you claim car expenses for more than one vehicle, you can use a different method for each car.
No. You cannot claim a deduction for any car expenses your employer has already reimbursed.
Different rules apply to motorbikes, utes and vans with a load capacity of one tonne or more, and minivans that seat nine or more passengers. You claim these under travel expenses rather than car expenses. See our article on travel expenses for more detail.
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