Car Expense Method Optimizer Australia 2026-27

91 cents per kilometre for 2026-27 (ATO LI 2026/D12). The 2025-26 return you lodge now uses 88c. 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 $4,550. No receipts are required, but you must be able to justify how you calculated your business kilometres (e.g. a 4-week diary).

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.

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.

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).

For 2026-27 the car depreciation cost limit is $69,883 (s40-230 ITAA 1997, indexed annually; $69,674 for 2025-26). If your car cost more than this, your depreciable base is capped at $69,883 — you cannot depreciate the extra amount. This only affects the logbook method; cents-per-km already bakes depreciation into the per-km rate.

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.