If you drive your own car for work, you can claim it at tax time — but only the work-related driving, and never your normal commute between home and your regular workplace. There are two methods, and picking the right one can be worth hundreds of dollars. Here is how they compare for 2025-26.
What counts as work-related driving
Deductible trips include driving between two separate workplaces, to a client or supplier, to a job site that is not your regular base, or carrying bulky tools you cannot leave at work. Your everyday trip from home to your usual workplace is private and is not claimable.
Method 1: cents per kilometre
You claim a set rate for each work kilometre, up to a cap of 5,000 work kilometres per car. The 2025-26 rate the Car Expense Calculator uses is 88c per kilometre, which bundles in running costs and depreciation.
- No logbook required, but you must be able to show how you worked out the kilometres (for example a diary of trips).
- Simple, and ideal for occasional work driving.
- Capped at 5,000 km, so the most you can claim this way is 5,000 × 88c = $4,400 per car.
Method 2: logbook
You claim the work-related percentage of your actual running costs — fuel, registration, insurance, servicing, repairs and depreciation.
- You need a 12-week logbook that represents your typical driving, plus receipts for your costs (fuel can be estimated from odometer readings).
- The logbook percentage is valid for five years unless your usage changes.
- Usually wins if you drive a lot for work or have a more expensive car to run.
Which should you use?
- Low work kilometres or a cheap-to-run car? Cents per km is simpler and often comparable.
- High work kilometres (well over 5,000) or higher running costs? The logbook method usually claims more, because you are not capped at 5,000 km.
The quickest way to decide is to put your real figures into the Car Expense Calculator, which shows both methods side by side. Then see the effect on your overall position with the Tax Refund Estimator.
A worked example
Say you drove 8,000 kilometres for work this year:
- Cents per km: you are capped at 5,000 km, so 5,000 × 88c = $4,400. The other 3,000 work kilometres earn nothing under this method.
- Logbook: if your logbook shows 60% work use and your total running costs (fuel, registration, insurance, servicing and depreciation) come to $12,000, you claim 60% × $12,000 = $7,200.
Here the logbook method is worth about $2,800 more. Below roughly 5,000 work kilometres the gap usually closes and cents per km wins on simplicity. The Car Expense Calculator runs this comparison on your real figures.
Records checklist
- Cents per km: a diary or note of your work trips showing how you reached your kilometre total.
- Logbook: a 12-week logbook (valid for five years), plus receipts or statements for your running costs and your car's purchase details for depreciation.
- Keep records for five years from the date you lodge.
A note on electric vehicles
If you charge an EV at home, the ATO has a set per-kilometre electricity rate you can use to value home charging under the logbook method, and commercial charging is claimed from your receipts. The cents per km method already bundles energy in, so there is no separate charging claim there.