# Can I claim Motor Vehicle Expenses as a business expense in Australia?

**Yes, fully claimable.** Yes, Australian businesses can claim motor vehicle costs using either the cents-per-kilometre method (88 cents per km for 2024-25 and 2025-26, and 91 cents per km for 2026-27, up to 5,000km) or the logbook method (actual costs × business use percentage from a 12-week logbook).

Typical amount: Up to $4,400 under the cents per kilometre method for 2025-26 (5,000 km at 88 cents) and up to $4,550 for 2026-27 (5,000 km at 91 cents). Logbook claims of $8,000 to $15,000 are common for high mileage.

## 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. The rate for the 2026-27 income year is 91 cents per kilometre, set by the Commissioner's determination LI 2026/19. It is a base rate of 89 cents with a temporary one-off uplift of 2 cents. The rate covers all running costs including decline in value, registration, insurance, maintenance, repairs and fuel, so no other car expenses can be added on top. The 5,000 km limit applies per car. A claimant must be able to show how the kilometres were worked out. A logbook must cover a continuous period of at least 12 weeks and be supported by the odometer readings for the income year.

## 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
- Odometer readings at the start and end of the year to support a logbook claim

## 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
- Kilometres above 5,000 per car under the cents per kilometre method

## 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.

**Important:** The car limit for depreciation was $69,674 for 2025-26, and cars costing more than the limit are depreciated on the limit only. The instant asset write-off does not apply to a car above the limit, and a car cannot use the cents per kilometre method for more than 5,000 km.

Source: https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/transport-and-travel-expenses/car-expenses

## Related expenses

- [Instant Asset Write-Off](https://accounts-os.com/au/expenses/asset-write-off-australia)
- [Superannuation Contributions](https://accounts-os.com/au/expenses/superannuation-australia)
- [Professional Fees (Accountants, Lawyers)](https://accounts-os.com/au/expenses/professional-fees-australia)