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Compare the ATO cents per kilometre method (88c/km, max 5,000 km) vs logbook method to maximise your work-related car expense deduction. 2025–26 ATO rates.
Business use: 33.3%
Annual Running Costs
ATO effective life: 8 yrs (12.5%/yr)
If you have a car loan
Claim for the year you drove the kilometres, not the year you lodge
Select the bracket that matches your total income
Max deduction
$3,400
Tax saving
$1,088
km claimed
3,500 km
Saving per week
$21/wk
Cents per km — 88c/km
Logbook — 33.3% business use
The logbook method gives $320 more in deductions and saves you an extra $102 in tax.
This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.
If you use your car for work, you can claim a deduction for the work-related portion of your car running costs. Work-related travel includes: driving between two workplaces, travel to client visits, driving to buy work supplies and travel for other work duties — but it excludes your ordinary commute from home to work.
The ATO offers two methods for calculating your deduction. The cents per kilometre method is simple and requires no receipts. The logbook method can produce a larger deduction if you drive extensively for work and have high running costs.
The ATO cents per kilometre rate for the 2025–26 income year is 88 cents per kilometre. This covers all car running costs including fuel, insurance, registration, servicing and depreciation. You can claim up to 5,000 km per car per income year under this method.
No — the cost of travelling from home to your regular place of work is not deductible. However, if you carry bulky tools or equipment that must be transported because there is no secure storage at work, your commute may be partially deductible. Travel between two workplaces, or from home to a client site, is deductible.
No receipts are required for the cents per km method. However, you must be able to show how you calculated your work km — a diary, calendar entries, logbook or odometer readings are all acceptable. The ATO may ask you to substantiate your claim.
A logbook must cover at least 12 continuous weeks and be kept for a complete income year. Once complete, it is valid for 5 income years — you don't need to keep a new logbook each year unless your work travel pattern changes significantly.
The cents per km method is capped at 5,000 km per car and covers all running costs in one rate, so it tends to produce more where the kilometres are low or the car is cheap to run. The logbook method has no kilometre cap and claims a percentage of actual costs, so it tends to produce more where the kilometres are high or the running costs are large. The comparison above does the arithmetic on the figures you entered.
Rates checked against the ATO, verified 8 September 2026
Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.
Rates and thresholds last updated for the 2026–27 financial year.
This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.
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This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.