What’s under the bonnet?
If you use your own car for work purposes, you can claim a deduction using the cents per kilometre method or logbook method. If you use someone else’s car for work purposes, you can only claim for direct costs you pay for – such as fuel.
You can claim a deduction for car expenses if:
You can’t claim a deduction for normal daily journeys between home and work except in limited circumstances where you carry bulky tools or equipment (such as an extension ladder or cello) that:
- your employer requires you to use for work
- you cannot leave at work.
You can calculate your car expenses in two ways
Cents per kilometre method
- You can claim a maximum of 5,000 business kilometres per car, using this method.
- Your claim is based on 68 cents per kilometre.
- You don’t need written evidence but you need to be able to show how you worked out your business kilometres (for example, by producing diary records of work-related trips).
- Your claim is based on the business-use percentage of expenses for the car.
- Expenses include running costs and decline in value. You can’t claim capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs (eg: adding paint protection and tinted windows).
- To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period. The logbook period is a minimum continuous period of 12 weeks.
- You can claim fuel and oil costs based on your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you used the car during the year.
- You need written evidence for all other expenses for the car.
Your vehicle is not considered a car if it is a motorcycle or a vehicle with a carrying capacity of:
You can only claim your actual expenses for these vehicles. You cannot use the cents per kilometre method and must use a logbook to show your work-related use
Keeping a logbook
Your logbook must cover at least 12 continuous weeks. If you started using your car for work-related purposes less than 12 weeks before the end of the year, you can extend the 12-week period into the next financial year.
If you are using the logbook method for two or more cars, keep a logbookfor each car and make sure they cover the same period.
Your 12 week logbook is valid for 5 years. However, if your circumstances change (eg, you change jobs) and the logbook is no longer representative, you will need to complete a new 12 week logbook.
Your logbook can be electronic or paper. An example can be found in the downloadable pdf below.
Download the full flyer here (includes example log book)