Car Expense Method Optimizer Australia 2025-26
Enter your business kilometres, running costs and car details, and see which ATO method — cents per km or logbook — gives you the bigger deduction and tax saving. Uses the 2025-26 rate of 88c/km and the $69,674 car depreciation cost limit.
Your car usage this year
Cents-per-km caps at 5,000 km (4,400.00).
Used to derive business-use % if no logbook % is entered.
Depreciation base capped at 69,674.00 for 2025-26.
Annual running costs (gross, pre-business-%)
Method comparison
Cents per km
Winner4,400.00
Claimable km5,000
Rate88c/km
Tax saving1,408.00
Logbook
2,825.00
Business-use %25.0%
Running × business %1,575.00
Depreciation1,250.00
Tax saving904.00
Cents per km saves an extra 504.00 in tax at your marginal rate of 32.0% (incl. Medicare).
Breakeven: at your current business-use of 25.0%, logbook wins when your total gross running costs + depreciation base exceed 17,600.00/year.
- Logbook method requires a valid 12-week logbook. If you do not have one, you can only use cents-per-km.
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Frequently asked questions
What is the cents-per-km rate for 2025-26?
88 cents per kilometre (ATO TD 2024/1). This rate covers fuel, registration, insurance, servicing, repairs AND depreciation — you cannot also claim a separate depreciation deduction if you use this method. You can claim a maximum of 5,000 business kilometres per car per year, which caps the deduction at $4,400. No receipts are required, but you must be able to justify how you calculated your business kilometres (e.g. a 4-week diary).
When does the logbook method beat cents per km?
Logbook typically wins when any of these apply: you drive more than ~5,000 business kilometres, your business-use percentage is above ~50%, you have an expensive car with high running costs and depreciation, or you pay significant finance interest. The calculator computes a breakeven figure at your current business-use percentage so you know where the crossover is.
How long is a logbook valid for?
A logbook must record a representative 12-week continuous period and is valid for 5 years, as long as your work-related driving pattern does not change significantly. If you change jobs, work locations or vehicle type, you need to start a new logbook. You still need to keep receipts for all running costs (fuel, rego, insurance, services, repairs) and a written-down cost for depreciation.
Can I mix the two methods?
You can choose a different method each financial year, but you cannot mix methods for the same car within a single year. You can, however, use different methods for different cars (e.g. cents-per-km for a second vehicle, logbook for your main car).
What is the car depreciation cost limit?
For 2025-26 the car depreciation cost limit is $69,674 (s40-230 ITAA 1997, indexed annually). If your car cost more than this, your depreciable base is capped at $69,674 — you cannot depreciate the extra amount. This only affects the logbook method; cents-per-km already bakes depreciation into the per-km rate.
Who can use cents-per-km?
Only individual taxpayers who own or lease the car themselves. Partnerships, companies and trusts must use the logbook method. Salary-packaged (novated lease) vehicles are normally claimed by the employer through FBT, not via the individual's tax return.