Calculating your deduction

 

You can use one of the two methods summarised below to work out your car expenses. Choose the method that gives you the largest deduction and ensure you have the necessary evidence.

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Method 1 – Cents per kilometre

• Your claim is based on a set rate for each business kilometre.

• You can claim a maximum of 5,000 business kilometres.

 

Method 2 – Logbook

• Your claim is based on the business use percentage of each car expense.

• You need a logbook so you can work out the percentage.

• You need odometer readings for the start and end of the period you owned or leased the car.

• You can claim fuel and oil costs based on odometer records.

• You need written evidence for all the other expenses for the car.

 

Do not include travel expenses including short-term car hire, public transport fares, bridge and road tolls, parking fees, taxi fares, or the work-related running costs of a car owned or leased by somebody else – a borrowed car. These are claimed as travel expenses.

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Do not include expenses for vehicles other than cars – for example, utility trucks or panel vans with a carrying capacity of one tonne or more, vehicles with a carrying capacity of nine or more passengers, or motorcycles. These are treated as travel expenses.

 

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Keeping your car records

 

What you may need:

• Written evidence of your car expenses – receipts, invoices or diary entries.

• A car logbook and odometer records.

• Details and calculation of depreciation claimed

• Calculating car expense deductions where the car is jointly owned, jointly leased or jointly hired under 

 

Retain this evidence for five years from the date you lodge your tax return. 

 

If you received an allowance for car expenses or a reimbursement that was worked out by reference to the distance the car travelled, you must show the amount of the reimbursement or allowance as income on your tax return if you also claim car expenses.

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