The Way You Claim Car Expenses Has Changed

Are you a sole trader or an individual in a partnership? Do you claim a deduction for business-related car expenses when you do your tax return?

Up until 2015 there were there were four methods to calculate and claim your work related car expense deductions:

  • 12% of the original value
  • One-third of actual expenses
  • A logbook for 12+ continuous weeks
  • Cents per kilometre

However, with new rules in place for 2016, things have changed!

As of 1 July 2015, you can no longer use the one-third of actual expenses or the 12% of original value methods. For the 2016 financial year (and future years) there will only be two ways to calculate your claim.

Cents per Kilometre Method

You now use a single rate of 66 cents per kilometre for all motor vehicles (regardless of the size of the engine).

You can claim a maximum of 5,000 business kilometres per car using this method.

Logbook Method

To use this method you need to keep a logbook for a minimum continuous period of 12 weeks.

You will need odometer readings for the logbook period and you can claim fuel and oil costs based on these records, or actual receipts. You will need written evidence for all other expenses.


The ATO has developed a Work-Related Car Expenses Calculator to assist you with your claim. Visit here for more information.

Important To Remember:

  • You cannot claim the cost of travelling between your home and your place of business, except in certain limited situations.
  • You cannot claim car expenses on your tax return if you were reimbursed for the same costs by your employer. Only claim it if you paid for it yourself.