If you use your motor vehicle for work purposes, you can claim motor vehicle expenses as tax deductions in your income tax return. The ATO allows for the two following methods to be used when tracking work-related motor vehicle expenses. 

The Logbook Method

The logbook method requires a logbook to be maintained for a continuous 12-week period, recording odometer readings of every trip taken and descriptions for the reasons the trips have been made. The logbook will then be valid for 5 years and will allow for all motor vehicle expenses to be claimed in line with the work-related usage of your motor vehicle recorded in your logbook.  Examples of motor vehicle expenses which can be included in your tax return under this method include:

  • Fuel and oil
  • Insurance 
  • Registration 
  • Vehicle repairs and maintenance 
  • Depreciation on the motor vehicle 
  • Interest on finance

Cents Per Kilometre Method

The cents per kilometre rate incorporates all expenses related to running a motor vehicle. This  allows you to claim up to 5000km at the rate set by the ATO each year. The rate is set at 72c per KM for the 2022 financial year and is set to rise to 78c per km for the 2023 financial year.  The ATO recommends diary evidence of work-related trips to be recorded to substantiate your KM’s for this claim.