Show download pdf controls
  • Methods for claiming work-related car expenses

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Method 1: Cents per kilometre

    • Your claim is based on a set rate for each business kilometre.
    • The rate is 66 cents per business kilometre.
    • You can claim a maximum of 5,000 business kilometres per car, per year.
    • You do not need written evidence, but you need to be able to show how you worked out your business kilometres. There is more information on record keeping and written evidence in Keeping your tax records.

    MyTax will calculate your deduction from the information you provide.

    Method 2: Logbook

    • 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. If you need to work out the decline in value of your car, see Deductions for decline in value (depreciation).

    • To work out your business use percentage, you need a logbook and the odometer readings for the logbook period (see below).
    • 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.

    Your business use percentage is the percentage of kilometres you travelled in the car for work during the year divided by the total kilometres travelled by the car during the year.

    If the pattern of your car use changed during the year, make a reasonable estimate of your business use percentage for the whole of 2017–18, taking into account your logbook, odometer and other records, any variations in the pattern of use of your car and any changes in the number of cars you used in the course of earning your income.

    MyTax will calculate your deduction from the information you provide.

    Deductions for decline in value (depreciation)

    You can claim a deduction for the decline in value of the car only if:

    • you use the logbook method and
    • you owned the car or hired it under a hire-purchase agreement.

    If you leased a luxury car, see Leased luxury car for more information.

    Remember:

    • the car starts to decline in value from the day you first use it, even if you don't begin using it for work until a later time
    • you can claim a deduction only for a year in which you used the car for work
    • if you owned your car for only part of the year, you will need to apportion your deduction accordingly.

    If you are claiming a deduction for the decline in value of a car, you can use the Depreciation and capital allowances tool, or see Guide to depreciating assets.

    Logbook period

    Your logbook is valid for five years. If this is the first year you are using this method, you must have kept a logbook during 2017–18. It 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 2018–19. (If you are using the logbook method for two or more cars, the logbook for each car must cover the same period.)

    If you established your business use percentage using a logbook from an earlier year, you need to keep that logbook and maintain odometer records. You also need to keep a logbook if we told you in writing to keep one.

    Your logbook must show:

    • when the logbook period starts and ends, and the odometer readings at these times
    • the total number of kilometres the car travelled during the logbook period
    • the number of kilometres travelled for work during the logbook period based on the journeys recorded for the period
    • the business use percentage for the period.

    Entries in the logbook for each business trip must be made at the end of the journey (or as soon as possible afterwards) and show the:

    • date the journey began and ended
    • odometer readings at the start and end of the journey
    • kilometres travelled on the journey
    • reason for the journey.

    Your records must also show the make, model, engine capacity and registration number of the car.

      Last modified: 28 Jun 2018QC 55470