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  • Logbook method

    This method is only for sole traders or partnerships claiming for a car.

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    Work out how much to claim

    To work out the amount you can claim with this method:

    1. Keep a logbook.
    2. Work out your business-use percentage by
      • dividing the distance travelled for business by the total distance travelled
      • then multiplying by 100.
       
    3. Add up your total car expenses for the income year.
    4. Multiply your total car expenses by your business-use percentage.

    The records you need to keep are:

    • an electronic or pre-printed logbook (available from stationery suppliers)
    • evidence of your actual fuel and oil costs, or odometer readings on which you estimate your fuel and oil use
    • evidence of all your other car expenses.

    If you're a sole trader with simple tax affairs, you can create a logbook and record business-related car trips using the myDeductions tool in the ATO app.

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    Example: Traveling for work

    At the end of the income year, Tim’s logbook shows he travelled a total of 11,000 kilometres. Of these, 6,600 were for business-related purposes.

    To work out the percentage of car travel used for business-related purposes, Tim made the following calculation: 6,600 ÷ 11,000 × 100 = 60% of travel was for business-related purposes.

    Tim's total expenses, including depreciation, are $9,000 for the income year. To work out how much he could claim as a deduction, Tim completed the following calculation:

    $9,000 × 60% = $5,400

    End of example

    What to record in your logbook

    Your logbook must contain:

    • when the logbook period begins and ends
    • the car’s odometer readings at the start and end of the logbook period
    • the total number of kilometres the car travelled during the logbook period
    • the number of kilometres travelled for each journey. If you make two or more journeys in a row on the same day, you can record them as a single journey
    • the odometer readings at the start and end of each subsequent income year your logbook is valid for
    • the business-use percentage for the logbook period
    • the make, model, engine capacity and registration number of the car.

    For each journey, record the:

    • reason for the journey (such as a description of the business reason or whether it was for private use)
    • start and end date of the journey
    • odometer readings at the start and end of the journey
    • kilometres travelled.

    Logbook timeframe

    If this is the first year you have used the logbook method, you must keep a logbook for at least 12 continuous weeks during the income year. That 12-week period needs to be representative of your travel throughout the year.

    If you started to use your car for business-related purposes less than 12 weeks before the end of the income year, you can continue to keep a logbook into the next year so it covers the required 12 continuous weeks.

    Each logbook you keep is valid for five years, but you may start a new logbook at any time.

    If you establish your business-use percentage using a logbook from an earlier year, you must keep that logbook and maintain odometer readings in the following years.

    If your circumstances change, such as a change in the type of work undertaken by your business, you may need a new logbook.

    Using the logbook for two or more cars

    If you want to use the logbook method for two or more cars, the logbook for each car must cover the same period. The 12-week period you choose should be representative of the business use of all cars.

    Depreciation of the motor vehicle

    If you use the logbook method, you can generally claim depreciation, or decline in value, of the motor vehicle. You can only claim depreciation on the business portion of the motor vehicle’s cost.

    You can apply the:

    • simplified depreciation rules by adding the motor vehicle’s cost to the small business pool or using the instant asset write-off (if eligible), or
    • general depreciation rules by claiming a deduction over the effective life of the asset.

    If the vehicle is a car, there’s a limit on the amount you can use to work out your depreciation claim – see Car cost limit for depreciation.

    See also:

    Things to remember:

    Last modified: 19 Aug 2019QC 33731