Can I Claim Motor Vehicle Expenses as a Business Expense in Australia?
Yes — Australian businesses can claim motor vehicle costs using either the cents-per-kilometre method (88 cents/km, max 5,000km, FY25) or the logbook method (actual costs × business use percentage from a 12-week logbook).
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What Australian Taxation Office (ATO) says
Method 1 (cents/km): 88 cents per business kilometre up to 5,000km, no receipts needed but reasonable record. Method 2 (logbook): keep a 12-week logbook to determine business use %, claim that % of actual costs (fuel, rego, insurance, services, depreciation). Logbook valid for 5 years if usage doesn't materially change.
When you can claim
- 88c/km (FY25), max 5,000km — simple method
- Logbook method with 12-week diary, claim business % of all costs
- Depreciation up to the car limit (A$69,674 for FY25)
- Tolls, parking on business journeys
When you cannot claim
- Home-to-work commuting (deemed private)
- Fines and infringement notices
- Private use portion of all costs
- Depreciation above the car limit
Good to know
Pro tip: If you drive >5,000 business km, the logbook method almost always gives a bigger deduction. Use a phone app to maintain the logbook automatically.
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