Logbook method

How it works

The logbook method allows you to claim the work-related portion of your actual car expenses.

Expenses you can claim include running costs such as fuel, electricity, servicing, registration, insurance and the decline in value, as long as you use the car in the course of earning your assessable employment income.

To calculate your deduction using the logbook method, you need to:

• keep a logbook that shows your work-related trips for a continuous period of at least 12 weeks and your odometer records
• keep receipts or other records of your car expenses
• use your logbook to calculate the deductible portion of your car expenses.

Keeping a logbook

Your logbook must:

• cover at least 12 continuous weeks and be broadly representative of your travel
• include the reason and purpose, as well as the destination of every work-related journey, the odometer reading at the start and end of each journey, and the total kilometres travelled on the journey
• include odometer readings for the start and end of the logbook period and the total kilometres travelled during that period.

Each journey in your logbook must be made at the end of the journey or as soon as possible afterwards.

Your logbook is valid for 5 years. However, if your circumstances change (for example, if you change jobs or move to a new house), and the logbook is no longer representative of your work-related use, you will need to complete a new 12-week logbook.

In each of the 4 years following the first year, you need to keep:

• odometer readings for the start and end of the full period you owned the car during the income year
• your work-related kilometres and use percentage for the income year based on the logbook.

If you are using the logbook method for 2 or more cars, keep a logbook for each car and make sure they cover the same period.

You can keep an electronic logbook using the myDeductions tool in the ATO app, or keep a paper logbook.

You must retain your logbook and odometer records for 5 years after the end of the latest income year that you rely on them to support your claim.

If you don't have a valid logbook, you can't use the logbook method to claim car expenses. You may be able to use the cents per kilometre method instead.

Keeping records of car expenses

In addition to keeping a valid logbook, you must keep the following records:

• receipts for your fuel and oil expenses, or a record of your reasonable estimate of these expenses based on the odometer readings for the start and end of the period you owned the car, the fuel consumption for your car and the average price of fuel during the income year
• receipts for other expenses for your car – for example, registration, insurance, lease payments, services, tyres, repairs, electricity expenses and interest charges
• a record of the purchase price of the car and how you work out your claim for the decline in value of your car, including the effective life and method you use.

Electric cars – records of electricity expenses

If your car is electric, instead of keeping receipts for fuel and oil, you must keep:

• receipts for electricity from commercial charging stations
• evidence that shows you incur electricity costs to charge your car at home, such as an electricity bill and how you calculated the direct cost of charging your car

Hybrid cars - records of fuel and electricity expenses

If your car is a hybrid, you must keep all the following:

• receipts for your fuel and oil
• receipts for commercial charging stations
• evidence that shows you incur electricity costs to charge your car at home, such as an electricity bill and how you calculated the direct cost of charging your car

Calculating your deduction

To calculate your deduction using the logbook method, following these steps:

Step 1 - Work out the total number of kilometres you travelled during the logbook period.

Step 2 - Work out the number of kilometres you travelled for allowable work-related trips during the logbook period.

Step 3 - Divide the work-related kilometres (2) by the total kilometres (1), then multiply by 100. This is your work-related use percentage.

Step 4 - Add up your total expenses for the period that you are claiming.

Step 5 - Multiply your work-related use percentage (3) by your car expenses (4). This is the amount you claim as a deduction.

'Work-related kilometres' are the kilometres your car travels in the course of earning your assessable employment income. For more information on what travel is incurred in the course of earning your assessable employment income, see Trips you can and can't claim.

Calculating electricity costs for your electric vehicle

If your car is an electric (zero emissions) vehicle (EV), you can calculate your electricity costs either by:

• calculating the actual amount you spent on charging your car at commercial charging stations or at home
• by multiplying the EV home charging rate for the relevant income year set out at paragraph 16 of Practical Compliance Guideline PCG 2024/2 Electric vehicle home charging rate - calculating electricity costs when a vehicle is charged at an employee's or individual's home by the total number of kilometres travelled during the income year based on odometer records.

Calculating fuel and electricity costs for your plug-in hybrid vehicle

If your car is a plug-in hybrid electric vehicle (PHEV), for the 2024–25 income year onwards, you can work out your fuel and electricity expenses either by:

• calculating the actual amount you spent on fuel and charging your car at commercial charging stations or at home
• using methodology set out at paragraphs 17 to 27 of PCG 2024/2, which allows you to use the EV home charging rate.

For the 2023–24 income year and earlier income years, you can only claim the actual amount you incurred on fuel and charging your EV at commercial charging stations or at home.

If you use the home charging rate in PCG 2024/2 to calculate your electricity costs for the income year, unless your EV or PHEV has the functionality to report the percentage of the car's total charge based on the charging location, you can't add the cost of any commercial charging stations to this amount. These amounts must be disregarded.

Working out the decline in value of a car

Cars are depreciating assets so a deduction for their decline in value can be claimed as a car expense if you are using the logbook method.

However, there is a limit on the cost of the car that you can claim as decline in value deductions over the car's effective life. This is referred to as the car limit.

If the cost of the car you purchase exceeds the car limit in the year you buy it, its cost for decline in value purposes will be the car limit. The limit is applied to the cost of the car, not your ownership interest in the car. This means if you purchase a car exceeding the car limit with another person jointly, you will use half of the cost limit for the purpose of calculating your decline in value deduction.

The Commissioner's determination of the effective life of a car is generally 8 years.

 

 

You can't claim a deduction for the decline in value of your car if you use the cents per kilometre method.