Guide · Updated 17 August 2026
Vehicle claims: log book or cents per kilometre?
Which trips count, the two methods and what each is worth, and why twelve weeks of records can be worth thousands.
How do you claim car expenses on tax in Australia?
Two methods for cars. Cents per kilometre: a set rate per work kilometre, capped at 5,000 km per car per year, with no receipts required but a reasonable basis for the kilometres claimed. Log book: keep a representative 12 consecutive weeks of trips to establish a business-use percentage, then claim that percentage of all running costs including fuel, servicing, insurance, registration, interest and depreciation. The log book stays valid for five years unless circumstances change materially, and for anyone driving significant work kilometres it produces a far larger deduction.
- Cents per km: capped at 5,000 km per car
- Log book: 12 consecutive weeks, valid 5 years
- Home to a regular workplace is not claimable
- Cars have a depreciation cost limit
Which trips actually count
Claimable: travelling between two workplaces in a day; from your workplace to a client, supplier or job site and back; carrying bulky tools that can't be securely stored at work; travel from home when home is genuinely your base of operations; and trips to an alternative workplace rather than your usual one.
Not claimable: ordinary home-to-work travel to a regular workplace, no matter how far, how early, or how much unpaid overtime you do. Working through lunch, being on call, or making a phone call in the car doesn't convert commuting into work travel.
Cents per kilometre
Simple: a set rate per kilometre, up to 5,000 work kilometres per car per year, covering everything — fuel, depreciation, maintenance, insurance. You don't need receipts, but you do need to be able to explain how you arrived at the kilometres: a diary of trips, a pattern of regular travel, or app records. Claiming a flat 5,000 km with nothing behind it is one of the ATO's stated concerns.
The log book method
Record every trip for 12 consecutive weeks — date, odometer start and finish, kilometres, and the purpose. That establishes a business-use percentage you apply to your actual running costs for the year. Keep the log for five years and re-do it if your pattern changes materially.
Worked example. A tradesperson driving 28,000 km a year with 70% business use and $14,000 of running costs (fuel, servicing, insurance, registration, interest, depreciation) claims $9,800. The same person on cents per kilometre is capped at 5,000 km — a fraction of that. Twelve weeks of diligence is the difference.
Depreciation and the car limit
Cars are subject to a depreciation cost limit — you can't depreciate more than the indexed threshold regardless of what you paid, and GST credits are limited correspondingly. Vehicles that aren't 'cars' for tax purposes — one-tonne utes, vans and trucks designed to carry loads over a tonne or more than eight passengers — generally fall outside that limit, which is one reason the commercial-vehicle question matters before you buy.
If the business owns the vehicle
When a company or trust owns a vehicle that's also used privately, fringe benefits tax enters the picture, and FBT frequently costs more than the tax saved. Options include employee contributions, a genuine log book to reduce the taxable value, or restricting private use. Structure this before signing the finance contract — retrospective fixes are expensive.
Frequently asked questions
How many kilometres can I claim without receipts?
Up to 5,000 work kilometres per car per year under the cents-per-kilometre method. You don't need fuel receipts, but you must be able to show how the kilometres were calculated — a diary or pattern of travel. Beyond 5,000 km you must use the log book method.
How long does a log book last?
A valid 12-week log book covers five years, provided your circumstances don't change materially — a new job, a different territory, or a change in work pattern means starting a new one. You still need odometer readings at the start and end of each year.
Can I claim travel from home to my first job site?
Sometimes. If you carry bulky tools that can't be stored securely on site, or home is genuinely your base of operations rather than just where you sleep, that first trip can be claimable. If you drive to the same depot every morning, it isn't.
Does an app count as a log book?
Yes — a GPS or log book app that records date, odometer readings, distance and purpose meets the requirement, and is far more reliable than a paper book in the glovebox. Just make sure it captures purpose, not only distance.
Can I claim my ute in full in the year I buy it?
It depends on the write-off provisions for that income year, the vehicle's cost, whether it's a 'car' for tax purposes, and your business-use percentage. Commercial vehicles often sit outside the car depreciation limit. Ask before purchase — the answer can change the after-tax cost by thousands.
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