Tax Deductions for Drivers (Australia 2025-26)

General information only. Speak with a registered tax agent for advice.

Vehicle expenses are the cornerstone of a driver’s tax return — but the ATO applies strict rules on which kilometres count and how you must calculate them. Whether you drive for a rideshare platform, deliver parcels, or operate a heavy vehicle, choosing the right method and keeping proper records can make a substantial difference to what you get back. This guide covers all driver types: rideshare, delivery, courier, and truck.

What you can claim

Expense	Typical range	Key rule
Vehicle running costs — logbook method	Actual work-use % of fuel, rego, insurance, servicing, and depreciation	Requires a 12-week logbook; most accurate method for high-work-use vehicles
Vehicle running costs — cents per km	88c/km (2025-26), up to 5,000 km	No logbook required; simpler but capped; cannot combine with actual costs
Tolls and parking (while working)	Full work cost	Must be incurred while carrying out driving duties — not during the commute to your start point
Phone mount and dashcam	Work-use % of cost	Directly used in earning income; apportion if used privately too
Phone and data plan	Work portion	GPS navigation, delivery apps, and communication while on the road are legitimate work uses
Sunglasses	Full cost (if driving is primary duty)	ATO accepts sun protection where driving is the primary income-earning activity
Protective clothing — hi-vis (truck drivers)	Full cost	Must be compulsory for the role; plain work clothing is not deductible
Overnight travel — meals and accommodation	Reasonable amounts	Only where work requires you to be away from home overnight; keep receipts
Heavy vehicle licence fees	Full cost	Deductible where the licence is required to perform your job
Union fees	Full cost	Fees paid to a registered union are fully deductible

What you cannot claim

• Traffic and parking fines. Penalties are explicitly excluded from deductions under s 26-5 of ITAA 1997, regardless of whether they were incurred while working.
• Commuting to your depot or first pick-up point. Travel from home to where you start work is a private expense. The work trip begins once you are on the job — not when you leave your driveway.
• Personal vehicle use. If you use your car for both work and personal trips, you can only claim the work proportion. Claiming 100% when you use the car on weekends or for errands is a known ATO red flag.
• Vehicle purchase price (outright). You cannot deduct the full purchase price of a vehicle in one year under the logbook method — it must be depreciated over its effective life (typically 8 years for cars).
• Meals during the day (non-overnight). If you are home each night, daily meal costs while driving are a private expense. Meals are only deductible on overnight trips away from home.

Worked example

Marcus is a full-time rideshare and delivery driver. He owns his car outright. Using a logbook, he establishes that 78% of his kilometres are work-related. His gross platform income for 2025-26 is $68,000.

Deduction	Amount
Fuel (78% of $4,800)	$3,744
Registration (78% of $900)	$702
Insurance (78% of $1,400)	$1,092
Servicing and tyres (78% of $1,200)	$936
Vehicle depreciation (78% of $3,500 annual)	$2,730
Tolls (work only)	$620
Phone mount + dashcam (100% work)	$180
Phone plan (70% work use)	$630
Total deductions	$10,634

At a marginal tax rate of 34.5% (including Medicare levy), Marcus’s deductions reduce his tax by approximately $3,669.

ATO audit triggers

• No logbook but claiming actual vehicle costs. You cannot claim actual running costs without a valid 12-week logbook. The ATO regularly disallows these claims in reviews.
• Cents-per-km claims close to or at the 5,000 km cap. The ATO knows many drivers claim exactly 5,000 km. If your actual work kilometres significantly exceed this, switch to the logbook method — but if you are claiming the full 5,000 without evidence, expect scrutiny.
• 100% vehicle use claimed. Unless you have a dedicated work vehicle you never use personally, a 100% claim is almost never supportable and is a clear audit signal.
• Mismatch between platform income and vehicle costs. If the ATO can see your platform income (gig companies report it) but your vehicle expenses seem disproportionately low or high relative to income, it can trigger a closer look.

Records you need

• 12-week logbook showing date, odometer start and end, kilometres travelled, and purpose of each work trip. Must be redone every 5 years or if circumstances change significantly.
• Odometer readings at 1 July and 30 June each year.
• Fuel receipts and service invoices to support the actual cost calculations.
• Toll receipts or e-toll account statements to substantiate toll claims.
• Platform income records (weekly/monthly summaries from the app or portal) to reconcile with your tax return.
• Receipts for equipment (phone mount, dashcam, sunglasses, hi-vis) showing date and amount.

Key takeaways

• The logbook method almost always produces a larger deduction than cents per km for full-time drivers — the 12 weeks of record-keeping is worth the effort.
• Your commute to the depot or first pick-up is never deductible; the work trip only starts once you are actively working.
• Keep your logbook and odometer records for five years after lodgement — the ATO can request them even after the return has been processed.
• If you earn over $75,000 from driving activities (including GST-exclusive amounts for rideshare), you must be registered for GST — this applies from your first dollar of rideshare income regardless of total turnover.

Sources

• ATO car expenses
• ATO logbook method
• ATO occupation and industry guides hub
• ATO claiming deductions 2025
• Legislative anchor: ITAA 1997 s 8-1, s 26-5, and Div 28

Next step

• Estimate your refund with the Tax Return Calculator
• Model your taxable income with the Income Tax Calculator

Occupation guides

• Tax for Truck Drivers — overnight travel, vehicle expenses, allowances
• Tax for Delivery Drivers — car expenses, phone, allowances, GST
• Tax for Couriers — vehicle costs, tolls, GST, gig-economy records