- Claim up to 5000km per year using this method
- No log book required
- ATO can ask you to explain how you calculated your claim and how the use of your car was work related
- You can claim 66c per work related km
Example: Julie is an administration officer for a small business. Each day she does 4 trips in her car to collect/drop off the post and do the banking. She drives approximately 14km per day in work related travel.
Therefore Julie can claim:
- 14km X 5 days = 70km p/week
- 70km per week X 48 weeks (Julie has 4 weeks leave each year) = 3360km
- 3360km X $0.66 = $2217.60
This means at item D1 Julie can claim a car expenses deduction about of $2217.60
Car Logbook Method
- Keep a logbook for 12 continuous weeks
- You must own the car
- You only need to complete the logbook process one time every five years (or less)
- Record all business trips AND all personal trips in your car logbook
- Keep receipts for all expenses related to your car, including
- Interest on loan costs
- Other running costs
Once you complete your logbook, it is possible to calculate your business-use percentage (that is the ratio, or percentage split, between between work and personal driving). Then you claim the business percentage of all expenses related to your car.
Example: Jeff is a sales manager and he kept a logbook for 12 weeks recording both work and personal trips. After that 12 weeks, Jeff added up the total kilometres travelled on work-related trips. Then he added up the total mileage. Next he divided work kms by total kms and that is his work-related percentage. For Jeff, it is 85%.
Jeff travelled 1000 km in total during the 12 week logbook period. He travelled 850 km on work-related trips.
- 850km divided by 1000km = 85%
Jeff adds up the receipts for all of his car expenses for the year, which total $8,350. Then he multiplies that by 85%, his work-related percentage.
- $8350 x 85% = $7097.50
Jeff can claim $7097.50 worth of car expenses at Item D1 on his tax return.