Calculate your car tax deduction for 2024–25 using the logbook method, and compare it to the ATO's 88 cents per km alternative.
Logbook Method vs Cents Per Km
There are two ATO-approved methods for claiming car expenses as a tax deduction. Choosing the right one can significantly affect your refund.
Logbook Method
The logbook method allows you to claim the business-use percentage of all actual car expenses:
- Fuel and oil
- Insurance
- Registration
- Servicing and repairs
- Depreciation (decline in value)
- Interest on a car loan
- Car wash costs
You must keep a logbook for at least 12 continuous weeks showing the purpose of each trip (business or private). The logbook is valid for 5 years unless your circumstances change significantly.
Cents Per Kilometre Method (2024–25: 88c/km)
The cents per km method is simpler — you claim 88 cents per business kilometre up to a maximum of 5,000 km (capped deduction of $4,400). No logbook is required but you must be able to demonstrate how you calculated your business kilometres (e.g., diary, calendar records). This is ideal for lower-mileage drivers or those without a complete logbook.
| Feature |
Logbook Method |
Cents Per Km |
| Cap on deduction | None | 5,000 km ($4,400 max) |
| Records required | 12-week logbook + receipts | Business km records only |
| Expenses covered | All actual costs | All-inclusive per km rate |
| Best for | High km or expensive cars | Low km or simpler claims |
Frequently Asked Questions
How does the car logbook method work for tax?
You keep a logbook for at least 12 continuous weeks recording the purpose (business or private) and distance of each trip. This establishes your business-use percentage, which you then apply to all your actual annual car expenses to determine your deductible amount. The logbook is valid for 5 years if your car use doesn't change significantly.
What is the ATO cents per km rate for 2024–25?
The ATO's cents per kilometre rate for 2024–25 is 88 cents per km, up from 85c in 2023–24. This method is capped at 5,000 business km per year, giving a maximum deduction of $4,400. No logbook is required but you need records showing how you calculated your business kilometres.
What car expenses can I include in the logbook method?
You can include fuel and oil, insurance, registration, servicing and repairs, car wash costs, depreciation (decline in value), and interest on a car loan. Add up all these costs for the year, then multiply by your business-use percentage from your logbook.
Does the car have to be used for work to claim?
Yes. Travel must be work-related — such as travelling between two workplaces, visiting clients, or travelling to a work site. Ordinary commuting between home and your regular workplace is generally not deductible unless you are required to transport heavy or bulky equipment.
Can I claim car expenses if the car is not registered in my name?
You may still be able to claim if you can show you incurred the expenses — for example, if you paid fuel and running costs for a car registered to your spouse. The ATO assesses whether you genuinely incurred the expenditure, not whose name is on the registration.
How often do I need to redo my logbook?
A logbook is valid for 5 years, as long as your circumstances haven't changed significantly (e.g., you haven't changed jobs or moved home). After 5 years, or when your use pattern changes materially, you need to start a new 12-week logbook period.