Calculating car expenses prior to 1 July 2015
For 2014–15 and earlier income years, there are four different methods for claiming work-related car expenses.
If you are claiming up to 5,000 business kilometres you can use either the:
If you are claiming for more than 5,000 business kilometres you can use either the:
After 1 July 2015, you can only use the cents per kilometre and logbook method.
12% of original value method
This method is not available after 1 July 2015.
With this method you could claim 12% of the original value of your car, up to the 'car limit' (which was $57,466 for 2014–15).
If you bought the car you could claim 12% of the purchase price. If you leased the car you could claim 12% of its market value at the time you started leasing it.
Under this method:
- your car must have travelled more than 5,000 business kilometres during the income year
- you don't need written evidence to show how many kilometres you have travelled, but you must be able to show us how you worked out your business kilometres
- you can't claim a separate deduction for your car’s depreciation.
Example: using the 12% original value method
Raji’s vehicle cost $20,000. She had the vehicle for the full year and met the requirements to make a claim under this method. Raji worked out she could claim $2,400 for her vehicle expenses, as follows:
End of exampleOne-third of actual expenses method
This method is not available after 1 July 2015.
With this method you could claim one-third of your car expenses.
Under this method:
- your car must have travelled more than 5,000 business kilometres during the income year
- you must have written evidence of your fuel and oil costs, or odometer readings on which your estimates are based
- you must have written evidence of all your other car expenses.
You must also keep records that show:
- your car’s odometer readings at the start and end of the period of ownership or leasing in the income year
- the car’s engine capacity, make, model and registration number
- how you worked out your business kilometres and any reasonable estimate you made.
Example: using the one-third of actual expenses method
Kosta’s vehicle expenses totalled $9,000 for the income year. These costs were for:
- fuel and oil
- registration and insurance
- interest on a loan to buy the vehicle
- repairs and maintenance
- depreciation.
Kosta met all the other requirements for claiming under this method. He worked out he could claim $3,000, as follows:
End of example