myTax 2024 Work-related car expenses

Things to know

Complete this section if you incurred car expenses as an employee for a car you owned, leased, or hired under a hire-purchase agreement.

To claim a deduction for a work-related expense:

• you must have spent the money yourself and weren't reimbursed
• it must be directly related to earning your income
• you must have a record to prove it (usually a receipt).

You can only claim a deduction for the work-related portion of an expense. You can't claim a deduction for any part of an expense that is not directly related to earning your income or that is private.

If your total claim for all work-related expenses is more than $300, you must have written evidence to prove your claims.

You must choose to use either the cents per kilometre method or logbook method to work out your car expense deduction.

You can claim

You can claim the cost of trips you undertake in the course of performing your work duties. This may also include trips between your home and your workplace if:

• you used your car because you had to carry bulky tools or equipment that are essential to perform your employment duties and could not leave at your workplace because there was no secure storage (for example, an extension ladder or cello)
• your home was a base of employment (that is, undertaking work in 2 locations is necessary due to the nature of your duties and you were required to start your work duties at home and travel to your workplace to complete those particular work duties)
• you had shifting places of employment (that is, you regularly worked at more than one site each day before returning home).

Work-related car expenses also include the cost of trips:

• between 2 separate places of employment when you have a second job, providing one of those places is not your home
• from your normal workplace or your home to an alternative workplace that is not a regular workplace (for example, a client’s premises) while you are on duty
• from an alternative workplace that is not a regular workplace back to your normal workplace or directly home.

If the travel was partly private, you can claim only the work-related part.

Claim at this section any work-related car expenses incurred in earning assessable foreign employment income shown on an income statement or PAYG payment summary – foreign employment.

If you received an award transport payment from your employer, you can claim a deduction for work-related car expenses these payments cover.

If you no longer own or use your car and you previously claimed a deduction for its decline in value, you may need to make a balancing adjustment.

If you use someone else's car for work purposes, you can't claim a deduction for expenses using the cents per kilometre method or the logbook method. However, you can claim a deduction for actual costs you incur that relate to your work use of someone else's car at Work-related travel expenses.

For more information, see

• Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employee's transport expenses?
• Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses
• Law Administration Practice Statement PS LA 1999/2 Calculating joint car expense deductions.

Related pages

Claiming deductions
How to claim deductions in your return using myTax.

Records you need to keep
Records you need to show a payment or expense, the format to keep your records in, and how long to keep them.

You can't claim

You can't claim normal trips between your home and your workplace, even if:

• you did minor work-related tasks at home or between home and your workplace
• you travelled between your home and workplace more than once a day
• you were on call
• there was no public transport near work
• you worked outside normal business hours
• your home was a place where you ran your own business and you travelled directly to a place of employment where you worked for somebody else.

You can't claim a deduction for car expenses that:

• you pay for under a salary sacrifice or novated lease arrangement
• your employer reimburses you for.

Cars you use under a salary sacrifice or novated lease arrangement are usually on lease by your employer from a financing company. As you don't own or lease the car yourself under these arrangements, you will not be entitled to claim any deductions for using the car.

Don’t show at this section

Don't show the following at this section:

• Expenses relating to motorcycles and vehicles with a carrying capacity of one tonne or more, or 9 or more passengers, such as utility trucks and panel vans, go to Work-related travel expenses.
• Expenses you incurred in earning assessable foreign employment income not shown on an income statement or PAYG payment summary – foreign employment, go to Foreign employment.
• For any balancing adjustment, show your    
  • losses at Other work-related expenses
  • profits at Other income.

Any balancing adjustment amounts calculated in the Depreciation and capital allowance tool will show automatically.

Calculation methods

There are 2 methods you can use to work out your car expenses deduction:

• cents per kilometre method
• logbook method

You can use the one that gives you the largest deduction or is most convenient.

Both methods require you to know or estimate your work-related kilometres. Work-related kilometres are the kilometres you travelled in the car in the course of earning assessable income (includes work-related activities).

Cents per kilometre method

• Your claim is based on a set rate for each work-related kilometre.
• You can claim a maximum of 5,000 work-related kilometres per car, per year.
• The rate is 85 cents per work-related kilometre.
• You don't need written evidence, but you need to be able to show how you worked out your work-related kilometres.

The cents per kilometre rate incorporates all expenses you incur for:

• decline in value
• registration
• insurance
• maintenance
• repairs
• fuel costs.

You can’t add these expenses on top of the rate when calculating your deduction using the cents per kilometre method.

Logbook method

• Your claim is based on the work-related use percentage of the expenses for the car.
• Your work-related use percentage is worked out by:    
  • dividing the kilometres you travelled in the car for work during the year by the total kilometres travelled by the car during the year
  • then multiplying by 100.
• There is no limit on the work-related kilometres per car per year that can be claimed under this method
• You need a logbook and the odometer readings.
• Expenses include running costs and decline in value but not capital costs.    
  • You can claim fuel and oil costs based on either:    
    • your actual receipts
    • an estimate of the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.
  • You need written evidence for all other expenses for the car.

Capital costs include the purchase price of your car, the principal amount borrowed to buy it and any improvement costs.

For more information about the logbook method, including what to record in your logbook and the logbook timeframe, see Logbook method.

Deductions for decline in value (depreciation)

You can claim a deduction for the decline in value of the car only if:

• you use the logbook method
• you owned or leased the car or hired it under a hire-purchase agreement.

If you leased a luxury car, see Leased luxury cars.

Remember:

• the car starts to decline in value from the day you first use it, even if you don't begin using it for work until a later time
• you can claim a deduction only for the period in the year in which you used the car for work
• you must apportion your deduction to reflect the     
  • period you owned the car
  • percentage that the asset was used for work purposes.
• you must have directly incurred the cost of the asset and it was not reimbursed.

For more information, see Guide to depreciating assets.

Completing this section

You may need:

• written evidence for your car expenses (receipts or invoices)
• your car logbook and odometer records.

We pre-fill your tax return with work-related car expense information you uploaded from myDeductions. Check them and add any work-related car expenses that have not pre-filled.

To claim work-related car expenses, you must first show income from salary and wages or foreign employment income in the Income statements and payment summaries section.

To personalise your return to show work-related car expenses, at Personalise return select:

• You had deductions you want to claim
• Work-related expenses

To claim your work-related car expenses, at Prepare return select 'Add/Edit' at the Deductions banner.

At the Work-related car expenses banner:

1. For each work-related car that has not been pre-filled, select Add.
2. Enter the description of the car (for example, registration, make or model).
3. Select the Calculation method you wish to use.
   If you qualify to use both methods, you can use the method that gives you the largest deduction or is most convenient. You can enter each in myTax to work this out. If you do, remember to delete the one you don't want to use.
4. If you select the 'Cents per kilometre' method, enter the number of work-related kilometres you travelled. Go to step 6.
5. If you select the 'Logbook' method enter the information into the corresponding fields. MyTax will calculate the total expenses.    
   • If you have calculated the decline in value of your car, enter the amount without any reduction for personal use. MyTax will multiply the decline in value you enter by the percentage of work-related use.
   • The Depreciation and capital allowances tool can help you to work out any decline in value deduction. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool when you add your work-related car expenses and select the 'Logbook' method.
     If you used this tool, the calculated decline in value amount will automatically exclude the personal use percentage. To display results from the tool you must select the logbook method.
     Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link.
6. Select Save.
7. Select Save and continue when you have completed the Deductions section.

Watch: The following video shows you how to use the Depreciation and capital allowances tool.

You need to keep records for 5 years (in most cases) from the date you lodge your tax return.

Our myDeductions tool is free to use and is available through the ATO app. The tool makes it easier and more convenient to keep records of your expenses and income in one place, including photos of your receipts and invoices.

Leased luxury cars

If you leased a luxury car and wish to claim a deduction at this section, this information about luxury cars will help you.

A leased luxury car is a leased car that at the time the lease began had a market value of more than the 'car limit' that applied in the relevant income year.

You can claim a deduction for the decline in value of a leased luxury car (but not for other leased cars). The car can be new or second-hand. You must use the logbook method.

When claiming a deduction for decline in value, the initial value that you use for the car is the limit that applied in the income year in which the lease began. For more information, see car limit.