NEWS & BLOGS

Car-related travel made up the bulk of work-related expense claims. In 2023-24, 3.6 million people claimed about $10.3 billion in car expenses.

If you use your car for work purposes, you’re entitled to claim the costs related to this – but only if you personally own the car you are using for this work.

If your car is owned by your employer or is part of your salary package, then you are unable to claim anything.

METHOD 1: CENTS PER KILOMETRE

Your claim by this method is based on a set rate for each business kilometre you travel. Under this method you are eligible to claim up to a maximum of 5,000 kilometres per year, per vehicle

If you travel in excess of 5,000 kilometres this method of claim may not be appropriate to you. You may be better off using the logbook method.

The claim value is calculated by multiplying the total business kilometres traveled  (limited to 5,000 per vehicle) by the standard rate of 88 cents per kilometre for the 2025 tax year. This figure takes into account all the vehicle running expenses (including depreciation)

You do not need written evidence, however you need to be able to demonstrate that you have covered the kilometres claimed. A diary of work-related journeys (including the kilometres traveled) will suffice.

METHOD 2: LOGBOOK

Your claim by this method is based on the business use percentage of each car expense. This is determined by a log book that must have been kept for at least a 12 week period, and must be updated every five years. Through your logbook you can claim all expenses that relate to the operation of the car at your percentage of business use

The logbook must record all business journeys made in the car over the 12 week period that it records, detailing:

• When the log book period begins and ends
• The car’s odometer readings at the start and end of the period
• The total kilometres traveled
• The business percentage for the logbook period

​​For each journey in the logbook, you must record:

• Date of journey
• Odometer readings at the start and end of the journey
• Kilometres  traveled
• Reasons for the journey
• If you make two or more journeys in a row on the same day you can record them as a single journey

You will need to keep all receipts throughout the year to justify your claim, such as insurance, servicing and repairs. Petrol can be estimated using the start and end odometer readings for the year, indicating the total kilometres traveled.

Depreciation is calculated as 25% of the written down value of the car (using the ‘diminishing value’ method).

WHAT YOU CANNOT CLAIM
You cannot claim the cost of normal trips between home and work because the travel is private, even if:

• You do minor tasks on the way to work, such as picking up the mail
• You travel back to work for a security call out or parent teacher interviews or if you are required to travel to and work more than once a day as you work a ‘split shift’
• You work overtime or shift work and no public transport is available to get you to and / or from work
• You live a long distance from your usual place of work

WHAT YOU CAN CLAIM
In limited circumstances, you can claim the cost of trips between home and work, where:

• You had shifting places of employment (that is, you regularly work at more than one site each day before returning home)
• You carry bulky tools or equipment for work and all of the following apply:
  • The tools or equipment are essential to perform your employment duties and you don’t carry them merely as a matter of choice
  • The tools or equipment are bulky – meaning that because of their size and weight they are awkward to transport and can only be transported conveniently by the use of a motor vehicle
  • There is no secure storage for such items at the workplace
• Your home is was your base of employment (that is, you were required to start certain work activities at home and travel to a workplace to complete this activities).

You can also claim a deduction for car expenses if you use your car to:

• Perform your work duties
• Attend work-related conferences or meetings away from your normal workplace
• Travel directly between 2 separate places of employment if neither of the places is your home
• Travel from your normal workplace to an alternative workplace and return to your normal workplace or home
• Travel from your home to an alternative workplace, then to your normal workplace or home