Claiming a deduction for car expenses

To claim a car expense deduction:

• Your vehicle must be a car (carries less than 1 tonne and fewer than 9 passengers).

• You must own or lease the car (not under salary sacrifice).

• Expenses must be for work-related trips (not home to work).

• You must have paid the expenses yourself.

• You must have records.

Claim as a work-related car expense in your tax return. Include any employer allowance as income.

Calculating deductions

Use one of two methods:

1. Cents per kilometre: Multiply work-related km by the set rate.

2. Logbook: Calculate percentage of work-related use.

Use the Work-related car expenses calculator to determine your deduction.

You can use different methods for multiple cars and change methods yearly.

Cents per kilometre:

For the cents per km method, multiply work-related km by the yearly rate. Work-related km are those traveled for work purposes.

Use the rate for the income year you're claiming:

• 2024-25: 88 cents/km

• 2023-24: 85 cents/km

• 2022-23: 78 cents/km

• 2020-21 and 2021-22: 72 cents/km

• Earlier years: see prior year forms

Claim up to 5,000 work-related km per car. Keep records of your calculations.

Joint owners can each claim up to 5,000 km for separate income-producing use.

The rate covers all expenses:

• Decline in value

• Registration

• Insurance

• Maintenance

• Repairs

• Fuel costs

Don't add these on top of the rate.

Records for cents per km method:

• No receipts needed

• Show car ownership

• Record work trips in a diary or ATO app

Logbook method:

• Keep 12-week logbook (valid for 5 years)

• Keep expense receipts

• Calculate deductible portion

For electric cars, keep electricity expense records instead of fuel and oil.

For electric cars, keep:

• Commercial charging station receipts

• Home charging cost evidence

• Odometer readings

Use 4.2c/km for home charging estimate. If using this rate, don't claim commercial charging costs separately.

Hybrid cars need:

• Fuel and oil receipts

• Commercial charging receipts

• Home charging cost evidence

• Odometer readings

EV home charging rate isn't applicable for hybrids.

Capital costs aren't claimable.

Logbook deduction calculation:

1. Total km during logbook period

2. Work-related km

3. Calculate work-use percentage

4. Sum total expenses

5. Multiply work-use % by expenses

Tools, tax info, and support available on ATO website.