Claiming a deduction for car expenses using the cents per kilometre method

What is the cents per kilometre method?

You can use this method to claim up to a maximum of 5,000 business kilometres per car even if you have travelled more than 5,000 business kilometres. For example, if you travelled 5,085 business kilometres, you can only claim the cost of travelling 5,000 kilometres with this method. You cannot claim for the extra 85 kilometres.

You do not need written evidence but you may need to be able to show how you worked out your business kilometres.

Calculating your deduction

Step 1

Multiply the total business kilometres travelled (a maximum of 5,000 for each car) by the number of cents allowed for your car’s engine capacity (from the Rates per business kilometre table below). Divide your answer by 100 to work out the amount in dollars that you can claim.

Step 2

Write the total amount on your tax return.

The Work related car expenses calculator can help you to calculate your claim.

Rates per business kilometre

Engine capacity		Cents per kilometre
Ordinary car	Rotary engine car	2008-09 income year
1600cc (1.6 litre) or less	800cc (0.8 litre) or less	63 cents
1601cc - 2600cc (1.601 litre - 2.6 litre)	801cc - 1300cc (0.801 litre - 1.3 litre)	74 cents
2601cc (2.601 litre) and over	1301cc (1.301 litre) and over	75 cents

Work out the amount you can claim for each car and add up all the amounts.

What to read/do next

For general information about car expenses, read Claiming a deduction for car expenses.

More information on estimating business kilometres is included in Claiming car expenses – what trips are work-related?

For working out your claim see the Work related car expenses calculator.

If you receive an award transport payment, you may also need to read Claiming a deduction for car expenses – award transport payments.

If you need help applying this information to your own situation, phone us on 13 28 61.

Last Modified: Tuesday, 30 June 2009