One of our most frequently asked questions is “how am I able to claim my car deductions?”
The ATO defines the ability to claim car deductions:
“… for motor vehicle expenses, if you use the vehicle in performing your work-related duties. How you work out your deduction will depend on if you are using:
- Firstly, a car your own, lease or hire (under a hire-purchase arrangement)
- Secondly, someone else’s car, or
- Finally, a motor vehicle, that is not defined as a car.”
The two main ways you are able to claim these deductions are:
- Cents per kilometre method, or
- the logbook method.
For both methods, we recommend using the ATO’s ‘myDeductions‘ tool. It has been designed to help you keep records of your car use.
Under the cents per kilometre method:
- A single rate is used. The rate is:
- 72 cents per kilometre from 1 July 2020 for the 2020–21 income year,
- 68 cents per kilometre for 2018–19 and 2019–20, or
- 66 cents per kilometre for 2017–18, 2016–17 and 2015–16.
Click here for more information and guidelines on the cents per kilometre method.
Under the logbook method:
- Expenses include running costs and decline in value but not capital costs.
- To work out your work-related use, you need a valid logbook and the odometer readings.
- You need written evidence for all other expenses for the car.
Click here for more information and guidelines on the logbook method.