ato car travel log book

• Tax Deductions
• Work Related Car Expenses
• Log Book Method

Log Book Vehicle

Log book records of business journeys are used to substantiate actual business percentage claims for work related car expenses.

To be valid for tax purposes, a log book must contain specific information, but there is no compulsory format. Trips information must be recorded as soon as practicable after the completion of the journey.

Log Book claims are only allowed by a taxpayer who owns or leases the car for which expenses are being claimed.

A log book for tax purposes has the following key features:

• A log book record of car trips doesn’t need to be kept for the whole year. The minimum requirement is a continuous 12-week period which commences in or before the tax year.
• Unless there is a change of circumstances a log book claim established in this way is valid for 5 years, at which time the minimum 12-week log book record must be repeated.
• It is permissible to keep a vehicle log book in electronic form, such as a spreadsheet or other program. It can be quite convenient to keep the log book as a spreadsheet on your computer, and update it regularly with your journey records.

Spreadsheet Motor Vehicle Log Book Template

We’ve prepared a simple Excel spreadsheet which serves the purpose. It handles the basic arithmetic needed to work out a business expense percentage.

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How To Claim The Car Logbook Method (Free Car Logbook Template)

The car logbook method is a good way to track your car expenses and claim them on your tax return (to increase your tax refund). But, you need to keep a car logbook.

If you use your car for work purposes,  the ATO will let you make a claim on your tax return for some car-related expenses . (Special note: Don’t have a logbook? That’s ok we’ve got a free logbook template below you can use instead).  

Is the logbook method right for you?

Generally speaking,  if you use your car a lot for work, the vehicle log book method will get you a bigger tax refund than the cents per kilometre method .

Why? Because using a logbook to claim work-related car use allows you to include a percentage of all of your car expenses (fuel, registration, maintenance, interest on loans etc.).

The other method of claiming car expenses (cents per kilometre) allows you to claim a set rate for fuel only. This means you miss out on claiming for all other car related expenses. Note: If you already know how the log book method works and just need the logbook template, please scroll down the page.

How the logbook method works

When you use the logbook method, you record every trip in your vehicle (both private and business) for a 12-week period. Your logbook is then used to calculate the “business use percentage” of your car across the year .

Your business use percentage is the percentage of kilometres you travel in your car for work-related purposes. It’s also the percentage of all of your car expenses you paid during the year that you can claim on your return.

By keeping a car logbook, it’s easy to calculate your business use percentage and provide the evidence the ATO requires.

It’s important to record every trip you make in your car for 12 weeks – not just work trips. If you don’t do this, the ATO will consider your logbook as invalid and may reject all of your car expense claims.

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How long is my car log book valid for?

Although it takes a bit of patience to get going, you only need to do a logbook once every 5 years. As long as your driving habits remains consistent each year, you can use that logbook for five years’ worth of tax returns.

This makes the car log book method really quite convenient to use. Even if you get a new car during that 5-year period, you can continue to use the old logbook as long as your work-related use hasn’t changed.

Free Car Log Book Template

Download a car logbook for free

A car logbook helps you get the most from your work-related vehicle use. Download this free car logbook template so you can keep track of each business trip you take.

How to complete your car logbook template

To work out your business use percentage,  you need to keep a logbook for your car for a “typical” 12 week period . These must be 12 consecutive weeks (i.e. 12 weeks in a row).

Your logbook must include every trip you take  – not just your work-related trips.

The logbook must include the following details:

• date for each journey
• start and finish times for each journey
• start and finish odometer readings for each journey
• total number of kilometres for each journey
• reason for each journey
• start and finish dates for the logbook period
• start and finish odometer readings for the logbook period
• total number of kilometres travelled during the period
• business use percentage for the period

Does the logbook method sound like a lot of effort?

It’s EASY, if you think about this:

• You only do it once every five years.
• Each entry takes 30 seconds and when you get a bigger tax refund at tax time, you’ll be glad you took the time!

Etax Special Tip: Don’t start your logbook if you have holidays coming up in the next 12 weeks. You’ll end up recording less work-related kilometres than usual and your refund won’t be as big!

If you would like help to make sure you fill out your logbook correctly, don’t hesitate to get in touch with us via Live Chat or Secure messages from within your Etax account .

How to calculate your business use percentage

Once you’ve completed your 12 week logbook, you’ll be able to calculate your car’s business use percentage.

To do this, divide your business use kilometres by your total kilometres, then multiply by 100.

So, for example, if you travel 4,000 kilometres in total for the 12 week period, and 2,200 of these were for business-specific purposes, you would do the following calculation:

2,200 ÷ 4,000 × 100 = 55%

In this example, your car’s business use percentage would be 55%. This means that you could claim 55% of all your vehicle expenses for the financial year.

What sort of vehicle expenses can you claim?

One of the greatest benefits of choosing the logbook method over the more basic cents per km method, is that you can claim more than just the cost of the fuel you use.

So, what are “vehicle expenses” in the eyes of the ATO when using the logbook method?

Vehicle expenses include:

• running costs such as fuel, oil, and servicing
• registration
• vehicle depreciation

Vehicle expenses DO NOT include:

• the purchase cost of the car
• parking tickets, speeding and other fines

Remember: record, record, record!

Of course, it’s not just your logbook records that you need to keep in order to maximise your car expenses claim in your tax return. You must also keep written evidence (such as receipts) of all the car expenses you are claiming. (Those items in the list above).

Always remember: Your car expenses claims cannot be guessed or made-up.  They must be legitimate, and you must have evidence of them. If you stick to the rules and  use the logbook method for claiming your car expenses , you can  maximise your tax refund,  without having to worry about the ATO becoming a back seat driver.

What other methods are there for calculating vehicle expenses?

Cents per kilometre method.

The other way to claim car expenses is the cents per kilometre method where you an claim up to 5000 km per year. This method is ok for people who use their car sporadically during the year.

However, if you drive more than 5000 km during the year, you are costing yourself valuable tax refund dollars, if you don’t keep a log book.

Not sure which is the best method for you? Ask us and we’ll steer you in the right direction!

Read our blog: Can I Claim My Car Expenses Without a Logbook? to learn more about the cents per kilometre method of claiming car expenses.

Other posts on tax deductions:

• Can you claim your work uniform as a tax deduction?
• Claiming Self Education Expenses as Tax Deductions
• Ironing out laundry expenses
• Assessing your expenses claims when travelling for work

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How do you fill out a car tax log book

Hi, I'm a little confused on the correct way to fill out a car tax log book. I understand the ATO states that multiple "journeys" on the same day can be treated as one journey. However I don't know how this should be entered into my log book. I have a couple examples:

29/01/24 to 29/01/24

start odo (160000) end odo (160050)

Reason: Home - main depot - home (carry tools, electrical)

business use : 50kms

This entry is where I left home and carried my bulky tools to the main worksite, completed work then carried my bulky tools back home ready for the next day.

30/01/24 to 30/01/24

start odo (160050) end odo (160110)

Reason: Home - main depot - hospital depot - home (carry tools, electrical)

business use : 60kms

This entry is where I left home and carried my bulky tools to the main worksite, then to a hospital worksite, then carried my bulky tools back home ready for the next day.

31/01/24 to 31/01/24

start odo (160110) end odo (160179)

Reason: Home - airport depot - airport duties - home (carry tools, electrical)

business use : 69kms

and finally this entry is where I left home and carried my bulky tools to the airport worksite, then used my car to drive around the airport completing jobs throughout the day, then carried my bulky tools back home ready for the next day.

Is this sufficient enough to put in my log book or should address's be included and split up over multiple journeys in the same day. The reason I ask is because there is limited space to include every place I go to as I may go to 5 or more worksites in one day. I don't mind having to write out multiple journeys for the same day, I just want to fill it out correctly and not have to worry about it being rejected for not enough information or anything like that.

Thank you for taking the time to consider this question.

• Report as inappropriate

Most helpful response

Most helpful reply

Hi @BShoey ,

The way you're recording each journey looks bang on. You need your:

• start & end dates of the journey ✔
• odometer readings at the start & end of the journey ✔
• reason for journey ✔
• total kms travelled ✔

Addresses aren't required for each journey. We've got more info on our website for what to record in your logbook if you'd like to take a look.

I'm not sure how you're recording this (paper/spreadsheet/ etc) but I'll let you know the ATO app also has the ability to record your trips under the myDeductions tool.

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ATO approved logbook apps for work travel

If you use your own car for performing work related duties (including a car you lease or hire), you may be able to claim a deduction on your tax return for vehicle expenses.

If the travel was partly private, you can only claim the work related portion of the trip. If you are using someone else’s car for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense.

As the number of Australians making work related car expenses continues to rise, the Australian Taxation Office (ATO) requires logbooks to be kept. By using a vehicle logbook, your tax deduction claim is based on your car’s “business use percentage”. Your business use percentage is the percentage of kilometres you travel in your car for business related purposes.

A logbook allows for easy calculation of business use percentage and easily provides evidence to the ATO. The ATO requires that logbooks are maintained for 12 continuous weeks, in which this period should be representative of your travel throughout the year.

If you started to use your car for work related purposes less than 12 weeks before the end of the income year, you can continue to keep a logbook into the next year to ensure its covers the required 12 weeks.

To be valid, your logbook must contain the following information:

• when the logbook period ends
• the car’s odometer readings at the start and end of the logbook period
• the total number of kilometres the car travelled during the logbook period
• start and finishing times of the journey
• odometer readings at the start and end of the journey
• kilometres travelled
• reason for the journey.
• the business use percentage for the logbook period.

ATO approved logbook apps

The ATO has created an app which has the ability to use GPS for a logbook, as well as approving a number of logbook and tracking systems which can be used to record work-related travel.

Whilst the following list is not all of the available travel recording systems, all have had a class ruling and received approval by the ATO.

ATO Logbook App

EROAD System

EZY2C GPS Tracking System

EZYCarLog Mobile App Logbook Solution

Smartrak Aust Pty Ltd Fleet Management System

GPSI ‘Vehicle Logbook Report’

TomTom Telematics System

LogbookMe In-Car Logbook Solution

MTData FBT Solution Telematics System (MTData Solution)

Helpten Pro Vehicle Telematics Solution (Helpten Pro)

Netstar Australia Pty Ltd telematics system

Fleetcare Pty Ltd telematics product

Quiktrak GPS tracking system

SmarTrak Aust Pty Ltd (PoolCar) booking system

Intelematics Australia Pty Limited CONNECT tracking and fleet management solution

If you have any questions in regards to any of the approved logbooks or for further assistance in keeping track of your work related travel, please give Samantha Oliver a call on 03 5443 0344.

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Ultimate Guide to Work Related Car ATO Logbook Expenses

The Australian Taxation Office (ATO) is looking more closely than ever before at our claims for work-related car expense claims . This is a good enough reason to go over your tax-claiming practices and make sure you are 100% squeaky clean.

Why is this particular type of claim under the magnifying glass of the ATO?

According to Kath Anderson, the ATO assistant commissioner, the reason is the unusually high percentage of work-related car expense claims during previous years.

Anderson told The Australian that more than 40 per cent of all work-related deductions were car expenses. This adds up to billions being drained from the tax system and is clearly why the ATO has chosen to spotlight this issue.

A potential solution is the Easy 12-week Tracking with GOFAR ATO Logbook App , but let’s look more deeply into the issue of tracking.

There are two things you need to take away from this article:

• The ATO has increased the scrutiny of work-related car expenses since back in 2018 which means you should revise your tax-claiming practices
• The ATO has enhanced technology that will make this more efficient than ever, which means that you should consider your own car diagnostic technology to keep in compliance.

“Ms Anderson said enhanced ATO technology made it easier to detect potential tax rorters, ­revealing nearly 3.75 million ­people claimed the expense last year at a cost of $8.8 billion.” – Kath Anderson for The Australian

What You’ll Learn

1. Which Work-Related Car Expenses Can Be Claimed?

You can only  claim expenses that are work-related and that have not been reimbursed to you in any other way. This is the same regardless of whether you drive a company-owned car, leased vehicle or your own car.

The following work-related travel expenses fall into that category:

• Using a car for business related trips, including conferences, but also company-related daily errands.
• Using a car to load, transport and unload work-related tools and objects that cannot be otherwise stored at your workplace.
• Using a car to travel between your two workplaces, your workplace and the alternative workplace and your workplace and the client’s premises while you’re on duty.

These potential expense claims DO NOT include:

• Travelling from home to work and back.
• Travelling back to work due to a work-related matter (security call, parent-teacher meeting).
• Travelling back home after overtime work with no public transportation available.
• Travelling privately and doing small business related errands like picking up mail on your way.

Let’s repeat this one more time, since it is extremely important – you can claim these expenses only if they haven’t been reimbursed to you by your employer.

“In other words, you cannot claim expenses that have already been paid by your employer, including salary sacrificing arrangements.” – Kath Anderson for Business Insider Australia

Now, let’s just take a quick moment to clear up some details and explain which vehicles you use that can be considered.

You can claim expenses when it comes to:

• Your own car or a car you leased yourself
• Your company car or a company-leased car
• Motorcycles and other vehicles that are not considered to be a car

It is clear enough what a motorcycle is, but let’s define what the ATO considers to be a “vehicle other than a car”. This includes all vehicles that can carry more than a tonne load OR nine or more passengers.

These include mini-vans, trucks, panel vans and similar means of transport.

Here is a good illustration of what can and cannot be claimed as an ATO car expense:

2. Who Can Claim Work-Related Travel Expenses?

Those who can claim work-related travel expenses are:

• Companies, trusts and partnerships
• Sole-traders

Companies, Trusts and Partnerships

As a company or trust, you can use the actual costs method to claim the following:

• Strictly business-related expenses for a vehicle that the company owns or leases, including the costs of providing the car to the employee.
• When an employee is given a company car, they can use it for private purposes, as well. In that case, the company may pay for the Fringe Benefit Tax (FBT) , which is tax deductible.

Sole Traders

As a sole trader, most of the rules above apply to you. You can also claim the following:

• Fuel, oil, repairs and servicing
• Lease payments and interest on your car loan
• Insurance and registration

However, if you work from a home office you can also claim some of those expenses. Again – only if you are driving the car for business purposes.

Sole Trader Example

Let’s say you are an interior designer who works from home. If you are going to a restaurant to discuss business with a restaurant owner and examine the place that needs to be decorated – you are entitled to claim expenses.

If you are going for dinner and you happen to get approached by the restaurant owner who heard you are a designer and wants to hire you – this is not something you can claim.

If you are going out to meet friends, spot great wallpapers that are perfect for your restaurant project, go in and buy them – but this is still not a business-related expense.

In other words, your purpose needs to be work-related in order to be able to claim the expenses.

Employees can claim travel-expense deductions if:

• The travel fits within the employment duties and costs are directly tied to the employee’s income-generating activities
• They incurred travel expenses travelling between work locations, neither of which is the employee’s home
• The employer asked for the travel to be undertaken
• The travel occurred during work time
• It occurs when the employee is under the direction of the employer

The employee must consider all the aspects of their job, both the official terms and the actual practice. They shouldn’t consider just one aspect to determine whether the expense is deductible.

The table below highlights travel-related expenses employees can claim and which ones are not.

Work-related Car Claims Example for an Employee

Michael is a Safety Officer in a factory. His tasks include making sure all the danger signs are positioned and that safety is ensured for everyone in the factory. He is also obliged to go to regular seminars and training when needed.

If Michael uses his car to drive to a work-related seminar that his employer asked him to attend, he can claim car expenses.

If Michael drives a company car to work every day, saying that he has to carry danger signs on and off work, the situation is different.

Generally, he cannot claim car expenses for this, unless in the following situations:

• His employer asked him to carry those signs every day
• It is, for some reason, impossible to store the signs in Michael’s workplace.

All that has been explained so far is mostly referring to the company employees. To some degree, there are differences in tax claiming if you are claiming taxes as an employee or if you are claiming as a sole trader or as a company.

Get a Logbook App to Track Vehicle Expense

3. Calculating Your Deductions

There are two methods to do this: the cents per kilometre method and the ATO logbook method . To decide which method to use, you first need to determine whether you drive over 5,000 kilometres a year for business or not.

• If you don’t – use cents per kilometre method.
• If you do – use the ATO logbook method.

Knowing what you can and cannot claim is the first step of your road toward neatly and tightly done taxes. The next step is to understand how to calculate your deductions.

Here are some more detailed explanations about both of these methods that are recommended to calculate work-related travel expenses.

The Cents per Kilometre Method

Best for: Those who want to claim less than 5000 km travelled

The standard rate per kilometre is 85 cents in 2023-24 . This rate includes all the expenses of your vehicle, including depreciation. To calculate your claim value, you multiply 85c by the total business kilometres travelled.

Rate per Kilometre By Financial Year:

• 85 cents per kilometre for 2023–24
• 78 cents per kilometre for 2022–23
• 72 cents per kilometre for 2020–21 and 2021–22
• 68 cents per kilometre for 2018–19 and 2019–20
• 66 cents per kilometre for 2017–18.

While you don’t need written evidence, it is important that you can explain and support your calculations during a possible audit.

Using a good and reliable ATO logbook app such as GOFAR (which has over 1000 four and five star ratings on the app store) is the most convenient way to do this.

It tracks my car travel fine. Easy to tag specific trips as business-related for reporting purposes at tax time. Anthony Bennett, Verified Customer, Oct 2020

Here is an example of this type of calculation, with the 2022-23 price per kilometre rate, which was 78 cents:

• Motor vehicle tax receipt exception: ‘set rate per kilometre method’ 78c per kilometre x up to 5,000 kms.
• This means that the maximum claim using this method will be 78c x 5,000 kms = $3,900.

Practical Example

“James is a carpenter and carries bulky equipment to and from work as there is no secure lock up on site. James has kept a log book for 12 weeks which shows his work travel is 95%. James purchased a Toyota Hilux which has a 2 litre engine on 01/07/2019 for $25,000 which he financed through a hire purchase chattel mortgage at an interest rate of 6%. His odometer reading on 30 June 2022 was 25,000 kms and his car does 500 kms on a 55 litre tank of petrol. The average cost for petrol in QLD was $1.95 per litre.” – Source: David Douglas Accountants

Here is more valuable information from Thompsons Australia which will help you keep on track when using the cent per kilometre method:

“Business kilometres under the cents per kilometre method is determined by ITAA 1997 s 28-25(3). These are kilometres the car travelled in the course of:

• producing assessable income, or
• travel between workplaces.

The idea of “reasonable estimate” does not have any further clarification in the tax law and takes its ordinary meaning. From a practical perspective: irregular work-related travel would need to be specifically listed down in a written record, and regular work-related travel (say between two work sites) may be calculated with reference to the number of trips made.

The written evidence of business kilometres travelled for an income year under the cents per kilometre deduction must be retained for five years. There is no need to lodge it with the income tax return, however, details relating to the calculation will be the initial question asked by the ATO in a review.” – Thompsons Australia

The ATO Logbook Method

Best for: Those who want to claim more than 5000 km travelled.

You should use the ATO logbook method if you exceed the 5,000 km limit.

It means you need the best ATO logbook app , like GOFAR and a way to track all your work-related car expenses.

Now, let’s get into the details of your ATO logbook .

Here is what it needs to contain:

• Precise time of ATO logbook start and end, with included odometer readings
• The total sum of kilometres driven
• Percentage of business-related drives

You need to do something quite similar for each of your journeys:

• Precise start and end of the journey, including the odometer readings
• Total kilometres
• Reason for the journey

“Your claim is based on the business use percentage of each car expense. This is determined by a log book that must have been kept for a minimum 12-week period, and must be updated every 5 years. Through your ATO logbook you can claim all expenses that relate to the operation of the car, at your percentage of business use.” – H&R Block Tax Accountants

If you have more than one vehicle, keep in mind that the 5,000 km limit is per vehicle and not per person. Still, if you exceed this, it’s time to learn how to do the ATO logbook method properly.

To properly claim your expenses in this way, you need to keep track of all the receipts. The necessary receipts will include those for car maintenance and insurance.

As for the fuel, it can be calculated from the odometer readings. Here is an example of the ATO logbook method from ATO Tax Rates Info .

Here is an example and a neat explanation of the ATO logbook method:

“At the end of the 12-week period, the work-related percentage can be determined. To do this, divide your business use kilometres by your total kilometres, then multiply by 100. For example: You’ve travelled a total of 5,000Km; 3,000km related to work, the calculation is therefore 3,000 / 5,000 x 100 = 60%.

Now that you’ve determined your work-related percentage, it’s important to know what expenses you are entitled to include as part of your claim. These expenses include:

• The running cost such as fuel and oil
• Registration
• Repairs and maintenance
• Depreciation
• Interest on motor vehicle loan
• Lease payments

Your total motor vehicle expenses are added up and then apportioned based on your ATO logbook percentage. Continuing on with the above example, your ATO logbook percentage is 60% and your total motor vehicle expenses are $10,000 so your deduction will be 10,000 x 0.60 = $6,000.”

Francis A Jones

4. How to Record Work-Related Car Expenses

There are different ways to keep a valid ATO logbook. You can use the e GOFAR adapter with an ATO logbook app, a mobile app, a simple spreadsheet or even just pen and paper.

ATO created a basic app themselves. You can see if it works for you and your business:

You can print out the template that was created by the Synectic group and enter your data manually:

For those that like to keep all their records in Excel, here is one that Coleman Advisory created.

Also, here is a video created by Ascent Accountants, explaining, step by step, how to use a spreadsheet ATO logbook .

However, for those who really want to make this method as easy as possible, they can simply use the GOFAR adapter . It works with cents per kilometre as well and it helps keep valid records.

Once you have your logs all sorted out and ready, visit the ATO website and put them into the online Work-related car expenses calculator .

Grab the Easiest Car Expense Tracker

5. Recent History of Tax Rates for Vehicles

The big change in the Australian tax return system happened on 1st July 2015. Before this date, there were 4 different ways to your work-related car expense deductions. The first two are still in use today.

• Logbook method
• Cents per kilometre method

The second two are NO LONGER in use:

• 12% of original value method – you could claim 12% of the original value of your car, in case your car value is less than $57,466. For leased cars you could claim 12% of its market value from the first time it was leased.
• one-third of actual expenses method – you were obliged to save written evidence of your fuel and oil costs, or odometer readings, and written evidence of all other car expenses.

The cents per kilometre method was allowed only for those who drove less than 5 000 km a year. For more kilometres, the remaining three methods were used. Only the ATO logbook method could be used regardless of the kilometres driven.

Are you wondering which method is the best one for you? The table below compares the logbook method and the cents per kilometre method to help you choose.

Another change happened in 2016, which affected the cents per kilometre method. Up to 2016, the price per kilometre depended on the size of your car engine. Ever since 2016, it’s been the same for all vehicles.

Before this change, this is how the prices looked:

6. Penalties for Fraudulent or Careless Claiming of Car Expenses

Penalties and their amounts depend on many factors. The factors taken into consideration include whether it is a late payment, incomplete payment or a missing payment.

Also, the amount of tax plays an important role. And last, but not least, it is critical whether you have knowingly tried to commit fraud or made a genuine mistake.

When it comes to car allowances, the Australian Taxation Office (ATO) is particularly vigilant.

If you receive a car allowance, which appears on your payslip, it is imperative to declare it as part of your taxable income, adhering to the car allowance ATO guidelines. This is because the ATO has measures in place to prevent ‘double dipping,’ which occurs when an individual claims more in deductions than they are entitled to.

The ATO relies on the fact that Australian citizens pay their taxes accurately and on time. However, that doesn’t always happen, so some of the measures to eliminate mistakes have been put to work.

Mainly, they are to fix the issue and, as the last resort, to penalise the taxpayer. These are:

• Interest (General and shortfall interest charges)

“CPA Australia head of policy Paul Drum said while penalties of up to 200 per cent of tax avoided may be applied under the law, the size of any penalty would depend on the nature of the breach. “Ordinarily … if a person makes an honest mistake, you’ll have to pay the primary tax, so the tax you avoided plus [interest],” Mr Drum said. For false or misleading statements, the ATO applies a penalty based on a percentage of the shortfall between the correct tax liability and the amount paid by the individual. Penalties range from 25 per cent to 75 per cent of the shortfall amount, depending on whether the breach was due to carelessness, recklessness or intentional disregard.” ABC News

Here are some of the claims that were targeted by the ATO:

“An employee manager claimed $3,800 in work-related car expenses. When we asked the taxpayer to verify that they owned the car and it was registered in their name, we discovered the car was under a novated lease arrangement. Employees who have a novated lease arrangement are not considered to have expenses in relation to the car, as their employer leases the car on their behalf. Claiming a deduction for these expenses is considered double-dipping. All deductions were disallowed and we applied a penalty.” – ATO Media release

“Some examples of the ATO uncovering incorrect claims for work-related deductions include the following:

1) A medical professional made a claim for attending a conference in America and provided an invoice for the expense. When the ATO checked, they found that the taxpayer was still in Australia at the time of the conference. The claims were disallowed and the taxpayer received a substantial penalty.

2) A taxpayer claimed deductions for car expenses using the ATO logbook method. The ATO found they had recorded kilometres in their log book on days where there was no record of the car travelling on the toll roads, and further enquiries identified that the taxpayer was out of the country. Their claims were disallowed.”

7. Most Common Questions about Claiming ATO Car Expenses

First of all, check how much you know about what an ATO car expense is and what can or cannot be claimed :

Let’s look into some of the questions people ask when it comes to claiming their work-related car expenses.

Q: Can I claim my car for work travel?

Answer by RJSanderson :

You can claim your car for travel between your home and your workplace if:

• you used your car because you had to carry bulky tools or equipment that you used for work and could not leave at your workplace (for example, an extension ladder or cello)
• your home was a base of employment (that is, you started your work at home and travelled to a workplace to continue your work for the same employer)
• you had shifting places of employment (that is, you regularly worked at more than one site each day before returning home).

Work-related car and travel expenses also include the cost of trips:

• between two separate places of employment (for example, when you have a second job)
• from your normal workplace to an alternative workplace while you are still on duty and back to your normal workplace or directly home
• from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client’s premises to work there for the day).

If the travel was partly private, you can claim only the work-related part. You cannot claim normal trips between your home and your workplace, even if:

• you did minor work-related tasks at home or between home and your workplace
• you travelled between your home and workplace more than once a day
• you were on call
• there was no public transport near work
• you worked outside normal business hours
• your home was a place where you ran your own business and you traveled directly to a place of employment where you worked for somebody else.

Q: What counts as business mileage?

Answer by MJA Business Solutions :

The ATO considers business mileage to be the kilometres traveled in a car for work-related purposes. This includes commuting from your usual workplace to meet clients, and:

• Attend off-site work-related meetings or conferences.
• Transport goods or retrieve supplies for work.
• Travel directly between multiple job locations, excluding your home.
• Move between your usual workplace and an alternate work site (not regularly visited), then return to your usual workplace or go straight home.
• Travel from home to an alternate work site (not regularly visited) for work duties, then proceed to your usual workplace or directly home, unless the alternate location has become a regular workplace.

Be aware that the ATO does NOT generally consider kilometres driven between work and home as “business” travel. Even if you stop off to pick up the mail on the way, or have to take multiple trips each day, travel between home and work is still considered private use.

There are exceptions. For example, if your home is your primary workplace and you need to travel to another workplace this would be classified as business use.

Q: If the business owns the car how much can I claim for depreciation?

The business will be able to depreciate the business-use percentage of the value of the car.

It is really important to remember that if you are classified as a small business by the ATO then you will be able to immediately claim the entire purchase price of a vehicle costing less than $20,000 including GST. A good incentive not to buy more cars than you really need!

Q: If I’ve got sign writing on the car can I write off the costs for my personal mileage?

Answer by MJA Business Solutions:

Wouldn’t this be nice? Unfortunately, the answer is no. If you put business advertising on your motor vehicle, the actual cost of the signwriting is tax deductible. However, to claim a deduction for the motor vehicle running costs all the normal rules apply.

Usually, the costs associated with personal use of the vehicle are not deductible . You can only claim deductions for the business use portion of the vehicle expenses, and you need to be able to substantiate these claims with appropriate records, such as a logbook.

Q: I am working in Sydney and visit a vendor in Sydney on a working day to discuss a business matter. Is this a FBT-related Expense? How about a business meal?

Answer by ATO:

If you are paying for your own meals, then it is not a fringe benefit. As meal expenses are generally considered to be a private expense, you will not be able to claim a deduction for your meal, even if it is related to a business matter.

If your employer is paying for your meals, or reimbursing your costs, this is a non-cash benefit and may require your employer to pay FBT. This will depend on the amount and frequency that your employer is paying for your meals. More information on FBT can be found at Fringe Benefits Tax.

Q: I’m a subcontractor – every day I pay my own petrol and travel expenses to and between my jobs – however I get this reimbursed back. However – On my weekly payslip it’s under “mobility allowance”. Do I claim this as a part of my income?

As your allowance appears on your payslips, you will need to declare it as part of your taxable income. This is considered a car allowance by the ATO, and it is important to understand the car allowance tax implications.

You may be entitled to claim certain deductions for vehicle and travel expenses. Please refer to vehicle and travel expenses to see if you are eligible and what you will need to claim these deductions.

It’s also crucial to keep detailed records of your travel expenses, including dates, distances, and purposes of your trips, as this information will be required when making your ATO car expense claims.

Q: My job requires me to travel frequently for a long distance. As a result, my employer reimburses my fuel expense. However, since fuel expense is only a small part of the operating expense, I am wondering if I could use the cost/kilometre method for claiming car expenses.

Answer by ATO Community Member :

To claim a work-related deduction:

• you must have spent the money yourself and weren’t reimbursed
• it must be directly related to earning your income
• you must have evidence

If you are paid a travel allowance, have a record to prove it.

If you receive a travel allowance:

• you must declare the allowance on your tax return as income
• you are entitled to claim a deduction for the actual expenses you incur, less any private component.

If you get paid an allowance for some travel expenses (including overtime meal allowances, and domestic and overseas travel allowances), you do not have to keep written evidence of your expenses provided your claim does not exceed the reasonable allowance amount we set for each year.

If you want to claim more than the reasonable car allowance amount we set, you need to keep evidence of your expenditure.

More questions and answers can be found on the ATO community website . You can see the concerns other people had and the answers given to them by other members of the community. You can also post your own questions about the specifics of your taxes and ask for useful tips and opinions.

You Need an ATO Logbook, ASAP

Since the tax system in Australia depends on Australian citizens being diligent about lodging their own taxes, it is important that you do so properly.

While this sounds reasonable, the Australian Taxation Office still reports that over-claiming taxes is one of the main forms of tax system abuse.

In 2018, the ATO announced increased monitoring of all work-related car expense claims.

You definitely want to make sure your taxes are 100% in order and that’s why you should review your practices and make sure your tax lodging is absolutely flawless.

Here is a checklist you can always come back to:

First of all, you can claim expenses for your own car or a company car. This includes cars that have been bought, but also leased cars.

Keep in mind that a car is considered to be a vehicle that can carry less than a tonne and/or nine passengers.

Two factors are essential to remember:

• You can only claim the expenses that occurred while you were doing business and not the ones that occurred while you used the vehicle for private purposes.
• You can only claim expenses that you paid for yourself and for which you weren’t reimbursed by your employer in any way.

While keeping these two factors in mind, you can now start to calculate your taxes, using one of the two methods.

• The cents per kilometre method for those vehicles that are not used for more than 5,000 kilometres a year.
• The ATO logbook method for all those cars whose odometer shows more than 5,000 kilometres a year.

You don’t have to hold on to all the receipts if you are using the cent per kilometre method. However, if you are being audited, you have to be able to support your claims and explain your calculations.

As for the ATO logbook method, it is necessary to have a precisely and diligently filled out ATO logbook that monitors a period of at least 12 weeks.

This ATO logbook needs to be updated every 5 years. For each trip, you need the following:

Additionally, you will need the receipts for all the expenses.

Unfortunately, this means that you have to think about all these details every time you drive your car. You need to record the odometer reading, your destination and the reason why you are going there. It takes a lot of time and if you forget any of these steps – you could be in trouble.

How to Make This Easier

One of the easiest, hassle-free and, in the long run, cheapest ways to do this every day is to use your smartphone and an app like GOFAR. The app tracks all the details you need for your tax and more.

What’s even more convenient is that you just jump into the car and start driving. When you’re done, you just swipe left or right and let the app know if that was a business or private trip.

GOFAR then holds on to those logs and you can email them to yourself in two taps on your phone screen. They’re delivered in a convenient spreadsheet format that makes calculations a breeze.

Now that you’ve settled on the ATO logbook method, consider downloading the GOFAR App like thousands of others.

I’ve had a good run with the device and it helps a lot so I don’t need to worry and sweat the small stuff. Ben Douglass, Verified Customer, Mar 2022

With a 4.5 star rating on the App Store, join over 20,000 users worldwide tracking their car expenses with their GOFAR.

Download GOFAR

Danny Adams

Co-founder of GOFAR and with a Computer Science background from Harvard University, and a Bachelor of Aerospace, Aeronautical & Astronautical Engineering (Honours), UNSW. I want to transform data from cars into useful services so -> drivers save time & money -> emissions fall -> Australian roads are safer. So we built an ATO-compliant logbook app called GOFAR . I write to help you understand how to use GOFAR to maximise business travel . Reach out via [email protected] .

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Deducting car expenses from ato - find the method for you, in this article, methods for claiming kilometres on tax, what car expenses are tax deductible, how many km you can claim on tax, cents per km claim, the logbook method claim, the actual costs method claim, travel for which you can claim car expenses, what if my employer has already reimbursed me for car expenses.

Individuals and companies alike are able to claim work-related car expenses as deductions when completing their tax returns with the ATO if they own or lease a vehicle.

You may be wondering what car expenses you can deduct and how many km you can claim on tax. This guide is intended to help you understand what options are available, and which is the right option for you.

The three ways of working out your ATO car expense deductions are:

• The cents per km method
• The logbook method
• The actual costs method

As an employee, sole trader or part of a partnership, you can use either the cents per km or logbook method if you drive a car - a vehicle that carries less than a tonne and can transport less than nine passengers.

However, if you drive another motor vehicle - a motorcycle, van, or one that can carry a load of more than a tonne, you must use the actual costs method. Companies that want to deduct their ATO car expenses, must also use the actual car expenses method.

Regardless of the method you choose, you will have to keep a vehicle log book. With the Driversnote logbook app you have the tool to ensure every business kilometre you drive is properly logged and categorised. 

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You can deduct all car expenses for maintaining and running your vehicle for business purposes. These include:

• Fixed costs - registration, insurance, interest on a motor vehicle loan, lease payments, depreciation
• Variable costs - maintenance, repairs, fuel costs, tyres, oil changes

Additionally, you can also deduct tolls and parking fees.

Depending on the method you use for claiming ATO car expenses, this varies.

• If you use the cents per km method , you can claim up to 5000 kilometres per financial year
• There is no limit to the kilometres you can claim expenses for if you use the logbook or actual costs methods

The cents per kilometre method of calculating your car expenses is the easiest way to work out your deduction.

The cents per km method provides a standard rate, incorporating all of the costs of owning and operating a car we've listed earlier in the article. Your cents per km claim will amount to the business kilometres you’ve driven, multiplied by the year’s rate. You can claim up to 5000 kilometres per tax year with this method.

The rates are set for each financial year - the 2024/2025 cents per kilometre rate is set at $0.88 per business km. The previous per km rate for 2023/2024 was set at $0.85 per business kilometre.

You need to keep track of the business kilometres you’ve driven throughout the year. Although you don’t need to submit a logbook of your driving, if the ATO asks you, you must be able to show how you worked out the deduction you are claiming.

It’s important to only claim deductions for eligible kilometres, as the ATO does audit these claims and can request evidence to support them.

The logbook method of calculating your work-related car expenses requires a little more work but can add up to a higher deduction - especially if you drive over 5000km business kilometres in a financial year. You can claim all the km you drove in a year by keeping a compliant logbook.

Using the logbook method, your claim is based on the work-related percentage of your car expenses.

Note that you aren’t able to claim capital costs like the purchase price of your car, the principal required for a loan, or any costs related to improving the car (like window tinting). However, you can claim depreciation of your vehicle. See how to calculate and claim your vehicle depreciation .

You will need to calculate the percentage of your total kilometres that are work-related. Unlike the cents per km method, you will need to be able to show a vehicle log book for a period covering at least 12 consecutive weeks, and if your driving fluctuates across a year, many people suggest maintaining a vehicle log book year-round for the best chance of a higher deduction. You can use that same 12-week logbook for the next five years so long as your driving doesn't change much.

You will also need to provide written evidence (receipts and/or invoices) for all of your car expenses, except for fuel and oil which can be estimated based on your odometer readings from the start and end of the logbook period if you don’t have receipts for your actual expenses.

The actual costs method is similar to the logbook method, with stricter recording requirements. There are two main differences between the two. Firstly, reporting your expenses using actual costs requires receipts for all expenses - including fuel and oil. Secondly, a logbook must be consistently maintained, as you must keep records that allow you to calculate the percentage of travel that was for business vs personal use.

In all other areas, the method of calculating your expenses using the actual costs method is identical to the logbook method.

To make sure that your ATO car expenses are eligible for tax claim, your travel needs to be specifically for work. Some examples of work-related travel include:

• Attending meetings away from your usual workplace
• Driving to a conference
• Collecting delivering items or supplies
• If you have a second job and you travel directly from one job to the other without going home first
• Travelling from your usual workplace or home to an alternative workplace (like a client’s office or a worksite)
• If your work can be classed as “itinerant work” – for example, if your job regularly requires you to work at more than one location each day before going home

Travel from home to work is generally not claimable , with limited exceptions. Some exceptions include:

• You have to start working from home and then travel to another site to continue working for the same employer
• The equipment or tools were required for your duties - that is, that you didn’t just choose to take them with you
• The equipment or tools were bulky - that is, they are awkward to move (because of their weight or dimensions) could only be transported by vehicle
• The equipment or tools were required to be kept at home - that is, there was nowhere secure to store the items at the workplace.

If your employer has reimbursed you for your car expenses, you will not be able to claim them as deductions in your tax return. This aims to prevent double-dipping, as an employer who reimburses your expenses is entitled to claim the relevant deductions themselves.

The exception is if you receive a car allowance rather than being directly reimbursed for your specific car expenses. This is because an allowance is treated as taxable income, similar to your salary. If you receive an allowance, you can still follow one of the methods above to claim your tax deduction.

That's it for our guide on the basics of how to claim a tax deduction for your ATO car expenses in Australia. You can read more on how to keep a compliant vehicle log book .

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ATO Logbook Requirements

Tim Ricardo

One of the best perks you can have as either an employee or a small business owner is to have a company car! As a small business owner, it’s important to keep track of your expenses for tax purposes, and when it comes to your motor vehicle the only correct way to do this is by keeping a logbook.

We’re going to take a look at the different types of logbooks available, how long you need to keep your logbook and what you need to do to maintain a valid logbook according to the Income Tax Assessment Act 1997 (ITAA) so you can avoid running afoul of the ATO!

What is a Logbook?

Nobody feels particularly excited when you think of a vehicle logbook …. But, nevertheless, it’s an important part of running a small business. So what exactly is a logbook? In a nutshell, A logbook is a record of the distance travelled by an individual who uses a vehicle for work purposes. In Australia, the Australian Taxation Office (ATO) requires anyone who claims a tax deduction for work-related car expenses to keep a logbook for a continuous period of at least 12 weeks. The logbook is used to calculate the business use percentage of the vehicle, which determines the amount of tax-deductible expenses.

There are two types of logbooks recognized by the ATO: paper logbooks and electronic logbooks. Both have their pro’s and con’s specifically in regards to storage and being able to keep the logbook for the period the ATO requires which we will cover later

Paper Logbook

A paper logbook is a physical record of the individual’s car usage, recording the dates, distances and purpose of each trip. The logbook must be maintained for a continuous period of 12 weeks and must contain the following information:

• The car’s make, model, registration number and engine number
• The dates the logbook covers and the date it was completed
• The individual’s name, occupation and business details
• The total distance travelled for the 12-week period
• The odometer readings at the start and end of the 12-week period
• The business uses a percentage of the total distance travelled.
• Finally you also need to record the odometer of the car on the 30th June annually for the 5 years after the logbook is completed.

Electronic or App-based Logbooks

An electronic logbook is a digital record of the individual’s car usage, recorded using a smartphone app or other electronic device. The electronic logbook must meet the same requirements as a paper logbook, but has the added convenience of being able to track and store the information in real-time – no needing to manually write out every trip! The ATO will accept electronic logbooks that are maintained with the same information as a paper logbook.

How Long Do You Need to Keep Your Logbook?

You may continue to use your logbook for five years from the date it was written. Because of this you should also keep it on hand for up to 5 years after the lodgement of the last return you claimed expenses.

For example, if you claimed your business use of your vehicle in the 2022-2023 financial year and lodged it on 31st May 2024, you may need to keep your logbook until 31st May 2029!

If you completed your logbook in the 2022-2023 financial year you can actually continue to claim your car on the same logbook for the next five years which means you could be using that logbook in your 2027-2028 tax return. Therefore your 2023 logbook may have to be kept another 5 years from lodgement which could be into 2034!

It sounds crazy but the ATO may need to review the logbook as evidence of an individual’s claim for a tax deduction in the event of an audit. If this happens the ATO will request to see the logbook and any other supporting documents.

What Do You Need to Do to Maintain a Valid Logbook?

In addition to the requirements we mentioned above to create a valid logbook, the logbook must also be an accurate and truthful record of the individual’s car usage for work purposes. Embellishing your vehicle’s work usage may seem like a good idea at first, but trust us – it can cost you big time in the long run! This also means that if a situation changes after creating the logbook (such as a pandemic when driving patterns change or changing jobs) then you need to start a new logbook to continue to claim on that car.

According to the ATO, individuals who claim a tax deduction for work-related car expenses must ensure that they have a reasonable basis for the claim. This means that the individual must have a valid reason for using the car for work purposes and must be able to prove that the expenses were incurred as a result of the work use.

Do I Need a Logbook for My Ute?

A Ute is generally not a car according to the ATO, for individuals you even use a different label on your tax return to fill in your deductions for vehicles other than cars. It is important to note that Logbook requirements for FBT-Exempt Vehicles such as utes can be different from regular cars. They are also different for businesses or employees and I have not covered the various complexities in this article however as a rule-of-thumb, if you are using a ute for both private and work purposes the most prudent course of action is to keep a full log-book as explained above. This will keep you out of any trouble when substantiating your claim and allow a fair claim to be calculated. Basically, it’s not enough to say you just use your ute 100%, you need to prove it!

Are Logbooks Required for Electric Cars?

An interesting new development is the FBT exemption on electric cars which means for companies there is no logbook required or fringe benefits tax on electric cars.

For employees you will still need to keep a logbook to claim in your individual return. So unless you can convince your employer to salary package an electric car you still need to use a logbook!

Logbooks Got You Down? We Can Help!

We get it – logbooks can be a real burden! But, overall while logbooks are tedious for 12 weeks, the rules are quite reasonable in allowing that same logbook for up to five years before having to suffer through the process again! Throw in the fact that technology is making keeping a logbook simple and straightforward, and it really isn’t all that much of a stress! But, if logbooks still have you scratching your head, Bishop Collins can help. Our friendly experts stand ready to share their expertise with you to ensure that you tick all the boxes when it comes to ATO logbook requirements. Get in touch with us today to see how we can help!

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Keeping travel expense records

Keeping receipts of your travel expenses, and a travel diary of your work-related travel activities.

Last updated 24 June 2024

Records you need for travel expenses

Unless an exception applies, you must keep records to support your claims for travel expenses. This may be a combination of:

• Written evidence of your expenses , such as receipts
• Travel diary or similar record of your travel activities.

You need to keep your travel expense records for 5 years from the date you lodge your tax return.

If you don't keep written records of your travel expenses, you can't claim your travel expenses as a deduction.

If you receive a travel allowance from your employer, you may be eligible for the record keeping exception .

Written evidence of your expenses

Written evidence of your expenses is a receipt or other document (paper, digital or electronic) that you get from the supplier of the goods or services. It must include all of the following:

• name of the supplier
• amount of the expense (in the currency in which you incur the expense)
• if this is not shown on the document, you can write the missing details on the document yourself. You must do this before you lodge your tax return
• if this is not shown on the document, you can use your bank statement, credit card statement or some other reasonable, independent evidence to show when you paid the expense
• date the receipt or document is created.

If you incur the expense in Australia the document must be in English. If you incur the expense in another country the document can be in a language of that country.

Travel diary or record of your activity

A travel diary is a document in which you record your travel activities.

The purpose of a travel diary is to help work out the work-related and private elements of your trip. You can only claim deductions for the work-related part of your expenses.

Do you need to keep a travel diary?

You don't need to keep a travel diary if you are away for fewer than 6 nights in a row.

If you are away for 6 or more nights in a row, you generally need to keep a travel diary.

If you receive a travel allowance from your employer, there are some circumstances where you may not need to keep a travel diary , even if you are away for 6 or more nights in a row.

Although you don’t need to keep a travel diary if your trip is for less than 6 nights in a row, you may still find it helpful to keep details of your travel.

How to keep a travel diary

For each activity on your trip, record:

• where you were
• what you were doing
• when you stopped for meals
• the date, and start and end times, of the activity.

Record the activity before it ends or as soon as possible afterwards. The diary must be in English.

Example: travel diary

Noel is a manager of a tool manufacturing company that has plants in Australia and New Zealand. He travels to New Zealand for 9 days to attend a conference in Auckland and visit the factory in Christchurch.

Before returning to Australia, Noel spends a few days visiting friends and sightseeing near Christchurch.

As Noel will be staying away from his home for more than 6 nights, he keeps the following diary of his travel.

Noel's diary entries show he was travelling for 12 days, 3 of these days are for a private purposes. He can only claim deductions for the work-related part of his travel. He can claim 75% of the cost of his flights (the part of the trip that was work-related).

Noel keeps his travel records for a period of 5 years from when he lodges his tax return.