Motor Vehicle Expenses
Tax deductions for work-related car use, claimable using the cents per kilometre method (91 cents/km up to 5,000 km) or logbook method.
Motor vehicle expenses for work-related travel can be claimed as a tax deduction using one of two methods. The cents per kilometre method allows you to claim a flat rate of 91 cents per kilometre (for 2026–27, up from 88 cents in 2025–26) for up to 5,000 business kilometres, without needing detailed records — though you must be able to show how you calculated the kilometres. This gives a maximum deduction of $4,550.
The logbook method requires you to maintain a logbook for a continuous 12-week period, recording every trip (business and private) to determine the work-related percentage of your car use. You then apply this percentage to your total car expenses for the year — including fuel, registration, insurance, servicing, tyres, depreciation, and interest on a car loan. The logbook is valid for 5 years provided your driving patterns haven't changed significantly.
Important: you cannot claim car expenses for ordinary commuting (home to regular workplace and back), as this is considered private travel. Work-related car use includes travelling between two separate workplaces, travelling from your workplace to a client's site, and travelling to different locations during the day for work purposes. If you carry bulky tools or equipment and have no secure storage at work, you may be able to claim the trip between home and work.
Related Terms
Taxable Income
Your assessable income minus allowable deductions — the figure used to calculate your income tax.
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.
Work From Home Deductions
Tax deductions for expenses incurred when working from home, claimable using the fixed rate method or actual cost method.
Travel Expenses (Work-Related)
Deductions for travel costs incurred for work purposes, including accommodation, meals, and transport when travelling away from home overnight.
Sole Trader
An individual who runs a business in their own name, reporting business income and expenses in their personal tax return.