How the method works
You multiply your work-related kilometres by a rate per kilometre set by the ATO for each income year. The rate is meant to cover all your car running costs — fuel, servicing, registration, insurance and depreciation — so you can't also claim those costs separately.
You can claim up to 5,000 business kilometres per car per year. If you drive more for work than that, the logbook method may give a bigger deduction.
Example: 3,200 work kilometres at 88 cents = $2,816 claimed at item D1.
Which trips count?
Generally deductible:
- driving between two separate workplaces or jobs;
- driving from your regular workplace to a client, supplier or alternative site and back;
- driving to work when you need to carry bulky tools or equipment that can't be left at work.
Generally not deductible:
- your normal commute between home and your regular workplace — even if you work late or do a minor task on the way;
- private trips, and trips your employer reimbursed.
What records do you need?
You don't need receipts for fuel or servicing with this method, and you don't need a formal logbook. But you must be able to show how you worked out your kilometres — for example a diary of work trips with the date, where you went, the purpose and the distance.
Cents per km or logbook?
| Cents per km | Logbook | |
|---|---|---|
| Limit | 5,000 work km per car | No limit |
| Records | Show how you worked out the km | 12-week logbook plus receipts for all car costs |
| Best for | Occasional work driving | High work use of the car |
Keeping the record with Intelligent Receipt
The mileage log in Intelligent Receipt records work trips with GPS or lets you add them afterwards with a start, destination, purpose and distance. It totals the kilometres per financial year, applies the 5,000 km cap and adds the claim to D1 in your tax return report.
Related: What receipts can I claim?