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.
2026 FY: 91c per kilometre
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 – 26 $69,674
2023 – 25 $69,674
2022 – 24 $68,108
2021 – 23 $64,741
Electric cars – records of electricity expenses
(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.
Electric vehicle home charging rate – plug-in hybrid electric vehicles
From 1 July 2024, if you own and use a plug-in hybrid electric vehicle (PHEV) you can use the EV home charging rate to calculate the cost of charging your PHEV at home.
a) To use the EV home charging rate of 5.47c per kilometre to determine the cost of your electricity, you must:
have kept the relevant records for the income year be claiming your car expenses using the logbook method or claiming your actual work-related vehicle expenses.
If you choose to use this rate and your vehicle doesn’t have the ability to accurately determine the home charging percentage, you can’t claim commercial charging station costs you incurred during the income year as a separate deduction.
The ATO requires:
- Odometer readings — ideally at the start and end of each FBT or income year.
- A valid logbook showing business vs private travel (if using the operating cost/logbook method).
- At least one electricity bill to demonstrate that you actually incur home electricity costs.
- For PHEVs — keep petrol receipts. You must separately calculate the petrol component using the manufacturer’s hybrid-mode fuel consumption figure and apply the ATO home-charging rate only to the electric kilometres.
b) Alternatively, you can choose to claim the electricity used for charging your PHEV by determining the actual cost incurred. Owners of zero emissions electric vehicles (EVs) can continue using the EV home charging rate provided they meet the relevant requirements.
(This guidance doesn’t apply to electric motorcycles or electric scooters).
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).