ATO cents-per-km method · 88¢/km rate · Up to 5,000 km deduction · Print-ready report
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The cents per km method lets you claim business vehicle expenses without keeping fuel receipts. The 2025–26 rate is 88 cents per km, capped at 5,000 km per vehicle per year (maximum deduction: $4,400).
Personal trips do not qualify — including home to work travel (unless you carry heavy equipment or work from a home office meeting ATO rules).
Always verify with the ATO or a registered tax agent. Rates are subject to change each financial year.
The cents per km method is the simplest way to claim vehicle expenses as a tax deduction in Australia. You record each business trip in a logbook (date, purpose, distance), and claim 88 cents for every kilometre driven for work purposes — up to 5,000 km per vehicle per financial year. The 2025-26 rate of 88¢/km was increased from the 2024-25 rate of 85¢/km.
This ATO-compliant logbook automatically calculates your total deduction based on your logged trips, separates business from personal travel, and generates a print-ready summary for your tax return or accountant.
| Feature | Cents Per KM (this tool) | Logbook Method (12-week record) |
|---|---|---|
| ATO rate (2025-26) | 88¢ per km | Actual vehicle running costs × business % |
| Maximum deduction | $4,400 (5,000 km cap) | Unlimited — based on actual costs |
| Records required | Date, purpose, start/end odometer | 12-week logbook + all receipts (fuel, insurance, registration, servicing) |
| Complexity | Simple | Complex |
| Best for | Under 5,000 business km/year or simple situations | High business usage vehicles, expensive cars, over 5,000 km/year |
| Fuel receipts needed? | No | Yes — all expenses |
| Trip Type | Deductible? | Notes |
|---|---|---|
| Home to workplace | ❌ No | Ordinary home-to-work travel is never deductible |
| Between two workplaces | ✅ Yes | E.g. office to client site, warehouse to office |
| Client visits and site inspections | ✅ Yes | Travel to meet clients away from your usual workplace |
| Picking up work equipment or supplies | ✅ Yes | Tools, materials, stationery for work purposes |
| Work-related conferences and training | ✅ Yes | If you attend for work, not personal development |
| Home to work (bulky equipment exception) | ✅ Sometimes | If you carry bulky tools with no secure storage at work |
| Financial Year | Rate per km | Maximum Deduction (5,000 km) |
|---|---|---|
| 2025-26 | 88¢/km | $4,400 |
| 2024-25 | 85¢/km | $4,250 |
| 2023-24 | 85¢/km | $4,250 |
| 2022-23 | 78¢/km | $3,900 |
| 2021-22 | 72¢/km | $3,600 |
What is the ATO cents per km rate for 2025-26?
The ATO cents per km rate for the 2025-26 financial year (1 July 2025 to 30 June 2026) is 88 cents per kilometre. This rate applies to all passenger vehicles regardless of engine size or fuel type, including electric vehicles. The cap is 5,000 business km per vehicle per year, giving a maximum deduction of $4,400.
Do I need fuel receipts to claim cents per km?
No. The cents per km method covers ALL car running costs in the one rate — you cannot add additional claims for fuel, insurance, or servicing. You only need to keep records of each trip (date, start/end odometer, trip purpose). This makes it significantly simpler than the logbook method which requires all receipts.
Can I claim home to work travel?
Generally no — home-to-work travel is a private expense and not deductible. Exceptions: if you are required to transport bulky tools or equipment that cannot be stored at work; if you work from home and travel to a second workplace; or if your home is genuinely used as a place of business under ATO criteria.
What if I drive more than 5,000 business km?
The cents per km method is capped at 5,000 km per vehicle. If you exceed this, consider the logbook method — which requires a 12-week logbook to establish your business use percentage, then applies that percentage to all actual car expenses. The logbook method has no kilometre cap and often produces a larger deduction for high-usage business vehicles.
Can I claim business km for my electric vehicle?
Yes. The ATO cents per km rate (88¢/km for 2025-26) applies to all passenger vehicles including electric vehicles. The rate covers charging costs, registration, insurance, and other running costs within the single 88¢/km figure — no separate charging claim is allowed under this method.
How long do I need to keep my logbook records?
You must keep your KM logbook records for 5 years from the date you lodge the tax return in which you claimed the deduction. If the ATO audits your return, you must produce your records. Digital records (including PDF exports from this tool) are accepted by the ATO as valid records.