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Claiming Car Travel

 

If you use your car for work you are entitled to claim the expenses that relate to the business costs of using your car to do your job. There are a number of methods you can use to claim the car expenses. You must own the car to claim under any of these methods and the record keeping requirement is detailed for each method.

 

 

 

Method 1 – Cents per kilometer

  • Your claim is based on a set rate for each business kilometer you travel and you can claim a maximum of 5,000 kilometers per year under this method. If you travel more than 5,000 kilometers the claim must be limited to 5,000 kilometers or you need to use an alternative method of claim.
  • The claim is worked out by multiplying the total business kilometers traveled (limited to 5,000) by the number of cents allowed for the car's engine capacity. This figure takes into account all the vehicle running expenses (including depreciation. The rates are adjusted each year.
  • You do not need written evidence but you need to be able to demonstrate that you have incurred the expense. Diary records will suffice.

 

Method 2 – 12% of original value

  • Your claim is based on 12% of the original value of your car. Luxury car limits apply.
  • Your car must have (or would have) traveled more than 5,000 business kilometers in the income year.

 

Method 3 – One-third of actual expenses

  • You claim one-third of your car’s expenses if you have not kept a log book.
  • Your car must have (or would have) traveled more than 5,000 business kilometers in the income year.
  • You need written evidence for all expenses for the car
  • If no written evidence is kept for fuel and oil costs a formula can be used to calculate the expense but odometer records must be kept.

 

Method 4 – Logbook

  • Your claim is based on the business use percentage of each car expense which is determined by a log book that must have been kept for a minimum 12 week period. This log book must be updated every 5 years.
  • The logbook must record all business journeys made in the car over the 12 week period it has been kept, recording:
  • When the log book period begins and ends
  • The car’s odometer readings at the start and end of the period
  • The total kilometers traveled
  • The business percentage for the logbook period

 

  • For each journey in the log book, you must record:
  • Start and finishing times of the journey
  • Odometer readings at the start and end of the journey
  • Kilometers traveled
  • Reason for the journey

 

 

 

if you make two or more journeys in a row on the same day, you can record them as a single journey

 

  • You can claim all expenses that relate to the operation of the car, at your percentage of business use, as established from your logbook.
  • You will need to keep all receipts throughout the year to justify your claim – insurance, servicing, repairs. Petrol can be estimated using the start and end odometer readings for the year, to indicate total kilometers traveled.
  • Depreciation is calculated as 25% of the written down value of the car (using the Diminishing Value method).

 

NB: From the 2015/16 income year, methods 2 and 3 (the ‘12% of original value’ and ‘one-third of actual expenses’ methods have been abolished and a single cents per kilometer rate (66 cents) has been introduced for method 1 (the ‘cents per kilometer’ method), irrespective of your car’s engine capacity.

Important Note: If your car is provided by your employer, or as part of your salary package you cannot claim any of the car costs, whatsoever.

 

What you cannot claim
You cannot claim the cost of normal trips between home and work because that travel is private even if:

  • You do minor tasks on the way to work, such as picking up the mail
  • You travel back to work for a security call out or parent teacher interviews

You work overtime and no public transport is available to use to get you home

How can we help?

1300 421 570
info@tas-australia.com
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