Work-related car expenses (2 methods):
1. Cents / per km method: maximum 5000km.
You do not need written evidence but you may need to be able to show how you worked out your work-related kilometres. You must keep records for odemetres at the beginning and the end of financial year.
2025 FY: 88c per kilometre
2024 FY: 85c per kilometre
2023 FY: 78c per kilometre
2. Logbook method:
Use a logbook to calculate the percentage of car expenses by recording the trips for 12 continuous weeks. A logbook is required every 5 years or when your job or circumstances change.
Note: The trips to and from your work place are normally not deductible, unless you have a home-based office and you start or end your day’s work from your home. You must also substantiate this fact.
You may claim the kms for carrying heavy tools from your home to your workplace.
Depreciation of Work-Related Motor Vehicles
Depreciation of cars for tax purposes can be claimed when used to produce taxable income. Depreciation generally is quite a big subject – read more here: depreciation.
Depreciation:
As a work-related expense, depreciation is one of the operating expenses claimable under the “One Third of Actual Expenses” and the “Log Book” methods.
Depreciation, or the ‘decline in value’, is the calculation of the costs to be allocated to each of the years of the vehicle’s use.
- cost base – generally has its normal meaning, being the amount paid for the vehicle and stamp duty paid.
- Usual life of the vehicle: according to the Tax Office estimate, the applicable base year
- the method of depreciation: diminishing value or prime cost method (see below)
- Consider the luxury car limit
Updates to the depreciation cost limits are released by the Tax Office once a year.
The depreciable cost of motor vehicle is also subject to the Luxury Car Limits, which assumes an upper limit on the cost. If the vehicle costs more than the limit, depreciation is only calculated on the limit. The limit is (incl GST):
2024 – 25 $69.674
2023 – 24 $68,108
2022 – 23 $64,741
2021 – 22 $60,733
Electric cars – records of electricity expenses/h3>
(1) Record keeping: you must keep:
- receipts for electricity from commercial charging stations
- evidence that shows you incur electricity costs to charge your car at home, such as an electricity bill and how you calculated the direct cost of charging your car
- odometer readings for the start and the end of the period that you are claiming.
(2) Alternatively, you can use the electric vehicle (EV) home charging rate of 4.2c per kilometre to make a reasonable estimate of your home charging expenses based on your odometer readings.
If you choose to use this rate but you also used commercial charging stations to charge the car during the income year, you must disregard your commercial charging station costs. They can’t be claimed as a separate deduction.
If your car can accurately report the percentage of its total charge based on the type of charging location (home versus commercial stations), you can use the EV home charging rate to calculate the cost of your home charging. You can also claim your commercial charging station costs. You do this by adjusting the total number of relevant kilometres by the home charging percentage and then multiplying those kilometres by the EV home charging rate and then adding your commercial charging station costs. You must still keep all of the records listed above if you calculate your charging costs in this way.
Example from ATO (QC72124): home charging percentage can be accurately determined.
Bill owns an electric car which he uses for work purposes. Bill charges his electric car at home and at commercial charging stations.
For the 2024-25 income year, Bill has:
- a valid logbook
- the odometer reading for his car at the start and the end of the income year
- an electricity bill for his home showing he incurred electricity expenses
- receipts for his commercial charging station expenses which total $172.
Bill’s car generates a report detailing the annual percentage of total charge that relates to home charging. The report shows that Bill charges his electric vehicle 75% at home during the 2024–25 income year.
Bill travelled a total of 10,000 km in the 2024–25 income year. His home charging kilometres are determined by applying the home charging percentage to the total kilometres travelled.
Bill calculates his home charging kilometres as:
- Total kilometres multiplied by home charging percentage equals home charging kilometres
- 10,000km × 75% = 7,500km
To calculate his total home charging expenses, Bill multiplies the home charging kilometres by the EV home charging rate:
- 7,500km × 4.2c/km = $315
Bill calculates his total charging expenses as:
- Home charging expenses plus commercial charging expenses equals total charging expenses
- $315 + $172 = $487
To calculate his deduction for charging his car during the 2024-25 income year, Bill will multiply his total charging expenses ($487) by his work-related use percentage from his logbook.
Hybrid cars – records of fuel, oil and electricity expenses
If your car is a hybrid, you must keep all the following:
- receipts for your fuel and oil
- receipts for commercial charging stations
- evidence that shows you incur electricity costs to charge your car at home, such as an electricity bill and how you calculated the direct cost of charging your car
- odometer readings for the start and the end of the period that you are claiming.
From 1 July 2024, you can use the EV home charging rate if the car you own and use for work is a plug-in hybrid electric vehicle (PHEV). For more information on how to calculate your home charging expenses for your PHEV using the EV home charging rate and the records you need to keep (QC72124).