If you use your car for work purposes, you are entitled to claim the expenses related to the business costs of your car. To claim, you must own the car and keep a record of all business-related expenses. If your car is provided by your employer or a part of your salary package, then you cannot claim anything at all.

Method 1: Log book

  • 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 of 12 weeks. This log book must then be updated every 5 years.
  • Your log book 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 kilometres travelled
    • The business percentage for the log book 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
    • Kilometres travelled 
    • 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 log book. 
  • 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 kilometres travelled. H&R Block has an app to help with this, download the H&R Block Tax App for free.
  • Depreciation is calculated as 25% of the written down value of the car (using the Diminishing Value method).
  • Logbooks can be purchased from H&R Block, a post office, Officeworks or any office supplier.

Method 2 – Cents per kilometre

  • Your claim is based on a set rate for each business kilometre you travel and you can claim a maximum of 5,000 kilometres per year under this method. If you travel more than 5,000 kilometres, the claim must be limited to 5,000 kilometres or you need to use an alternative method of claim.
  • The claim is worked out by multiplying the total business kilometres travelled (limited to 5,000km) by the standard rate of 66 cents per kilometre. This figure takes into account all the vehicle running expenses (including depreciation).
  • You do not need written evidence but you need to be able to demonstrate that you have incurred the expense. Diary records will suffice.

What car expenses you can claim

You can claim the cost of work-related car expenses if they are incurred whilst performing your job as an employee, such as:

  • Carrying tools or equipment required to complete your job
  • Travelling from your home to an alternative workspace (such as a client/supplier's office) and then back to your own workplace or home at the end of the day
  • Travelling between two separate workplaces where you are employed
  • Travelling to conferences, meetings or other events as required by your employer
  • Delivering or picking up items/packages related to your job, and as required by your employer

What car expenses you cannot claim

You cannot claim the cost of normal trips between home and work. That travel is considered 'private', even if:

  • You complete 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

If you are unsure of how to claim your specific car related expenses, H&R Block can help. Call 13 23 25 or book an appointment at your nearest office. H&R Block also supply log books and travel record cards, available at every office, for you to keep the necessary records year-round. Visit an office today.

August 2016

Book an appointment

Claiming car expenses during tax time can be a confusing and stressful task. Make sure you know what you can and can't claim when using your car for business purposes. H&R Block can help you ensure you are claiming all you're entitled to. Find your nearest office and book an appointment today.

Book now

Track your car expenses

Download the free H&R Block Australia tax app, designed to help you track your vehicle and work-related expenses and export all the information ready for tax time. The app also includes tax tips, checklists and a tax refund calculator.

Download the app

Using your mobile phone for work?

If you are one of the millions of Australians using their personal mobile phone for work purposes, you can claim a portion of the usage as a tax deduction if you paid for these costs and have records to support your claims.

Learn more

Book an appointment

Claiming car expenses during tax time can be a confusing and stressful task. Make sure you know what you can and can't claim when using your car for business purposes. H&R Block can help you ensure you are claiming all you're entitled to. Find your nearest office and book an appointment today.

Book now

Track your car expenses

Download the free H&R Block Australia tax app, designed to help you track your vehicle and work-related expenses and export all the information ready for tax time. The app also includes tax tips, checklists and a tax refund calculator.

Download the app

Using your mobile phone for work?

If you are one of the millions of Australians using their personal mobile phone for work purposes, you can claim a portion of the usage as a tax deduction if you paid for these costs and have records to support your claims.

Learn more