Show download pdf controls
  • Car expenses

    If you use your own car in performing your work-related duties (including a car you lease or hire), you may be able to claim a deduction for car expenses.

    If the travel was partly private, you can claim only the work-related portion.

    This information relates to car expenses only. A car is defined as a motor vehicle (excluding motor cycles and similar vehicles) designed to carry a load less than one tonne and fewer than nine passengers. Many four-wheel drive vehicles are included in this definition.

    For a summary of this content in poster format, see Car expenses (PDF, 514KB)This link will download a file.

    If you use someone else's car for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense (see Other travel expenses).

    For other vehicles (that are not cars), see Other travel expenses. Other vehicles include:

    • motorcycles
    • vehicles with a carrying capacity of  
      • one tonne or more (such as a utility truck or panel van)
      • nine passengers or more (such as a minivan).
       

    When working out your claim, you need to use the actual costs of your motor vehicle expenses. You need to keep receipts for the actual costs you incur such as petrol and oil. You can use a logbook or diary to separate private use from work-related trips.

    On this page:

    See also:

    When you can and can't claim car expenses

    When you can claim

    You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee – for example, to:

    • carry bulky tools or equipment (such as an extension ladder or cello) that your employer requires you to use for work and you can't leave at work
    • attend conferences or meetings
    • deliver items or collect supplies
    • travel between two separate places of employment, but not if one of the places is your home (for example, when you have a second job)
    • travel from your normal workplace to an alternative workplace that is not a regular workplace back to your normal workplace or directly home
    • travel from your normal workplace or your home to an alternative workplace that is not a regular workplace – for example, a client’s premises
    • perform itinerant work.

    If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return. The amount of the allowance is usually shown on your payment summary.

    When you can't claim

    Generally, you can't claim the cost of travel between home and work because this travel is private.

    For motorcycles and other vehicles (that are not cars), you can't claim work-related deductions under car expenses. However, you may be able to claim for work-related deductions under travel expenses (see Other travel expenses).

    Calculating your deductions

    You can choose one of the following two methods to calculate deductions for car expenses:

    If you are claiming car expenses for more than one car, you can use different methods for different cars. You can also switch between the two methods for different income years for the same car.

    The 'one-third of actual expenses' and '12% of original value' methods were abolished from 1 July 2015. For claims in earlier income years, see Calculating car expenses before 1 July 2015.

    Cents per kilometre method

    Under the cents per kilometre method:

    • A single rate is used. Your claim is based on 68 cents per kilometre for 2018–19 income year (or 66 cents per kilometre for the 2017–18 income year).
    • You can claim a maximum of 5,000 business kilometres per car.
    • 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).
    • Where you and another joint owner use the car for separate income-producing purposes, you can each claim up to a maximum of 5,000 business kilometres.

    Logbook method

    Under the logbook method:

    • Your claim is based on the business-use percentage of the expenses for the car.
    • Expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.
    • 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 either 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 had the car during the year.
    • You need written evidence for all other expenses for the car.

    See also:

    Owned or leased cars

    You can claim a deduction for using a car that you owned, leased or hired under a hire-purchase agreement using one of the methods described above – the cents per kilometre method or logbook method.

    You can't claim any expenses relating to a car owned or leased by someone else, including your employer or another member of your family.

    However, we consider you to be the owner or lessee of a car and eligible to claim expenses where a family or private arrangement made you the owner or lessee even though you were not the registered owner. For example, you can claim for a car that was given to you by another member of your family and which, although it was not registered in your name, you used as your own and for which you paid all expenses.

    See also:

    Damage to a third-party motor vehicle

    Where you use your own motor vehicle in the course of your employment and you are involved in an accident that causes damage to a third-party vehicle, you may be entitled to a deduction for the costs you incurred.

    If you are liable for the damages or compensation for the damage to the other vehicle, you may be entitled to a deduction for the costs you incurred.

    Where an accident occurs in the course of your employment, the expenses associated with your liability to pay for the damage to the other vehicle in the accident are incidental and relevant to the production of your assessable income. They are not capital, private or domestic.

    See also:

    Calculating car expenses before 1 July 2015

    This information only applies to car expenses you incurred before 1 July 2015.

    For 2014–15 and earlier income years, there are four different methods for claiming work-related car expenses when using your own car, or one you leased or hired under a hire-purchase agreement. The four methods are:

    You may need to make some adjustments to your claim if the car is jointly owned.

    If you use a borrowed car or a vehicle other than a car for work purposes, you can claim the costs you incur (such as fuel costs) as a travel expense. You can't use any of the methods described here to calculate your claim.

    See also:

    Cents per kilometre method

    • Your claim is based on a set rate for each business kilometre.
    • You can claim up to a maximum of 5,000 business kilometres per car.
    • 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).

    Where you and another joint owner use the car for separate income-producing purposes, you can each claim up to a maximum of 5,000 kilometres.

    12% of original value method

    • Your claim is based on 12% of the original cost of your car or 12% of its market value at the time you first leased it.
    • The cost or value is subject to a car limit for the year you first used or leased the car.
    • Your car must have travelled more than 5,000 business kilometres in the income year (or, if you used the car for only part of the year, it would have travelled more than 5,000 business kilometres had you used it for the whole year).
    • You don't need written evidence but you need to be able to show how you worked out your business kilometres.

    As a joint owner, you can deduct your share of 12% of the cost of the car. For example, where there are two joint owners, you can each claim a deduction of 6% of the cost of the car.

    One-third of actual expenses method

    • Your car must have travelled more than 5,000 business kilometres in the income year (or, if you used the car for only part of the year, it would have travelled more than 5,000 business kilometres had you used it for the whole year).
    • You claim one-third of all your car expenses, including private costs (but excluding capital costs, such as the purchase price, the principal on any money borrowed to buy your car and the cost of any improvements).
    • For fuel and oil costs, you can keep receipts to work out the amounts or you can estimate them based on odometer records that show readings from the start and the end of the period you had the car during the year.
    • You need written evidence for all the other expenses for the car, as well as records that show the car's engine capacity, make, model and registration number.

    As a joint owner, you can deduct one-third of your share of jointly incurred expenses and depreciation, and one-third of expenses wholly incurred by you.

    Logbook method

    • Your claim is based on the business-use percentage of the expenses for the car.
    • Expenses include running costs and decline in value but not capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.
    • 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 either 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 had the car during the year.
    • You need written evidence for all other expenses for the car.

    See also:

    Last modified: 21 Dec 2018QC 31951