How to Claim Work-Related Car Expenses

15th Jul 2019

You can claim vehicle and other travel expenses you incur in the course of performing your work duties, but generally you can't claim for normal trips between home and work – this is considered private travel.

You need to keep records of your travel expenses

Making a claim for car expenses

There are two ways to calculate a deduction for car expenses – the cents per kilometre method which limits claims to a maximum of 5,000 kilometres, and the log book method where claims are worked out using the percentage of work use of your car and actual expenses.

Cents per kilometre

You don’t need receipts but you need to be able to show how you worked out your business kilometres (for example, by producing diary records of your work-related trips). If you use the cents per kilometre method, your claim is based on a set rate (68c per kilometre from 1 July 2018) for each work-related kilometre travelled. You can claim a maximum of 5,000 kilometres per car.

The cents per kilometre method is there to simplify record-keeping, not to provide a free ride and if your claim is reviewed we will ask you to show how you have calculated your claim as well as provide details of your work-related car travel.

Logbook

If you use the logbook method your claim is based on the percentage of work use of your car and your actual expenses. To make a claim using this method you need to keep a logbook as well as records of your car expenses.

Your logbook must be kept for a minimum continuous period of 12 weeks and be broadly representative of your work-related car travel throughout the year. When keeping a logbook, you need to record odometer readings at the start and end of each journey as well as the journey’s purpose. You will also need to keep a record of your odometer readings at the start and end of each income year.

When calculating your car expenses you can use your receipts to claim fuel and oil costs, or you can estimate your expenses based on odometer readings for the period in which you used the car. For all other car expenses you claim, you must keep receipts. You will also need to keep details of how you calculated your claim for decline in value of your car.

Read more on the ATO Website