Car expenses

Did you have car expenses relating to your work as an employee?

There are four ways to work out your car expenses. Question D1 in Individual tax return instructions explains the methods and tells you what records you need to prove your claim.

Include the work-related cost of using taxis, short-term car hire, parking fees and tolls at item D2 on your tax return, see Travel expenses.

Show the cost of travel for self-education at item D4 on your tax return, see Self-education expenses.

If your employer reimbursed your car expenses calculated according to the distance travelled by the car, include the amount you received at item 2 on your tax return, even if you cannot claim a deduction for these expenses.

Types of travel for which you can claim car expenses

You can claim a deduction for the cost of using your car for work-related travel if:

• you travel directly between two separate workplaces because you have two different employers (for example, you have a second job)
• you travel for work-related purposes from your normal workplace to an alternative workplace and back to your normal workplace or directly home (for example, you go to a meeting at another establishment and then home)
• you travel between two workplaces or between a workplace and a place of business (for example, between two bases).

You cannot claim a deduction for the cost of travelling to another base for a social or mess function.

You can claim a deduction for the cost of using your car to travel between home and work if:

• you have to carry bulky tools or equipment for work (for example, ADF divers carrying diving gear) and there is no secure area for storing your tools or equipment at work
• your home is considered a base of employment and you either commence work at home and travel directly to another base of employment to continue working, or travel from another base of employment to home to continue working, or
• you travel from your home to an alternative workplace for work activities and then to your normal workplace or directly home (for example, you go to a training course at the Royal Australian Navy Fleet Base in Sydney).

You cannot claim a deduction for the cost of using your car to travel between your home and work:

• for a normal trip between home and work – this is a private expense even if you do small tasks on your way to or from work such as picking up your work’s mail, or
• just because
  • the travel is outside normal employment hours
  • you are on call, or
  • there is no public transport available.
   

For further information on the types of travel for which you can claim car expenses, see Taxation Ruling TR 95/17 – Income tax: employee work-related deductions of employees of the Australian Defence Force.

Motor vehicle provided by your employer or any other person

You cannot claim a deduction for car expenses if your employer or any other person provides a car for you and you do not pay for any of the running costs.

You cannot claim a deduction for expenses, even work-related expenses, that you incur to operate a car that:

• your employer provides, and
• you or your relatives use privately at any time.

Such expenses form part of the valuation of the car for fringe benefits tax purposes.