You can claim up to 5,000 work-related kilometres per car each year on your Australian tax return without keeping fuel, servicing, or insurance receipts. This is the Australian Taxation Office’s cents per kilometre method, and for the 2025–26 financial year the rate is 88 cents per kilometre, giving a maximum deduction of $4,400 per car.1Australian Taxation Office. Cents per kilometre method “Without receipts” is not the same as “without records,” though. You still need a reasonable basis for the kilometre figure you put on your return.
What the 88 Cent Rate Covers
The fixed rate is designed to cover every running cost of your car in one number: fuel, oil, registration, insurance, servicing, and depreciation. You don’t itemise any of those and you don’t need a receipt for any of them.1Australian Taxation Office. Cents per kilometre method You multiply your work-related kilometres by 88 cents and that’s your claim. Drive 3,000 work kilometres in 2025–26 and you claim $2,640.
The 5,000-kilometre cap is per car, not per job or per employer. If you use two cars for work during the year, you can claim up to 5,000 kilometres on each. The cap is firm, though. If your genuine work driving in a single car goes past 5,000 kilometres, this method won’t capture the extra, and you’ll need the logbook method to claim the full amount.
Which Vehicles Qualify
The ATO defines a car as a motor vehicle carrying a load of less than one tonne and fewer than nine passengers including the driver. That covers most sedans, hatchbacks, SUVs, utes under one tonne, and four-wheel drives. Electric vehicles, plug-in hybrids, and standard hybrids all qualify provided they meet the size limits.2Australian Taxation Office. Expenses for a car you own or lease
Motorcycles are excluded. So are vehicles carrying one tonne or more, and vehicles seating nine or more passengers, which rules out larger utes, minibuses, and utility trucks. Those expenses go elsewhere on your return, not at D1.3Australian Taxation Office. D1 Work-related car expenses 2025 The car must also be one you own or lease. You can’t claim under this method for a vehicle registered in someone else’s name.
Which Trips You Can Actually Count
The most common mistake is counting the daily commute. You can’t. Driving between your home and your regular workplace is private travel, and it doesn’t become deductible because you live a long way from the office or take work calls in the car.4Australian Taxation Office. Taxation Ruling IT 117 – Travelling expenses – between home and employment
Trips that do count include travel between two workplaces (from your main office to a client site or a second job), transporting bulky tools when your employer requires it and there’s no secure storage at work, travel between sites if you have no fixed workplace, and travel from home in the limited situations where your home genuinely serves as a base of employment. Each exception is read narrowly. The bulky-tools rule, for instance, won’t apply if your employer offers a locker or storage room you’ve chosen not to use.3Australian Taxation Office. D1 Work-related car expenses 2025
What Records You Still Need
The cents per kilometre method removes fuel dockets and mechanic invoices from the picture. It does not remove the need for evidence. You need to be able to show how you calculated your work-related kilometres. The ATO accepts a reasonable estimate approach: if you make a 20-kilometre round trip for work once a week and work 48 weeks in the year, your claim is 960 kilometres.5Australian Taxation Office. Cents per kilometre method
Records that support your figure include:
- A diary or notebook logging the date, destination, and purpose of each work trip
- Calendar entries matching work trips to your roster or schedule
- Odometer readings at the start and end of the financial year
- The myDeductions tool in the ATO app, which lets you log trips as they happen
These records don’t need to be formal, but they need to exist and to make sense. A round claim of exactly 5,000 kilometres with nothing behind it is the sort of figure that attracts attention during reviews.
Keep your records for five years from the date you lodge. If they’re accidentally lost or destroyed in a flood, fire, or burglary, the ATO may grant relief, but only if you can show you originally had them and made reasonable efforts to reconstruct them.6Australian Taxation Office. Records you need to keep
When to Switch to the Logbook Method
If your genuine work driving is over 5,000 kilometres in a car, the cents per kilometre method caps your deduction below what you’ve actually spent. The logbook method has no kilometre cap. It lets you claim the work-related percentage of your actual car expenses instead.
The trade-off is paperwork. You keep a logbook for at least 12 continuous weeks that represents your travel pattern for the year, recording the date, odometer readings, kilometres, and purpose of each trip, along with the car’s make, model, engine capacity, and registration. Once established, the logbook is valid for five years, but you need odometer readings at the start and end of each subsequent income year and receipts for every car expense you claim: fuel, insurance, registration, repairs, tyres, and loan interest.7Australian Taxation Office. Logbook method
For each car, you pick one method for the whole income year. You can’t split a year between both methods for the same vehicle.
Lodging Your Claim and What Happens If It’s Reviewed
On myTax, go to the work-related car expenses section, select the cents per kilometre method, enter your work-related kilometres and vehicle details, and the system calculates the deduction.8Australian Taxation Office. myTax 2026 Work-related car expenses On a paper return, enter the dollar total at D1 (work-related car expenses). The rate is 88 cents for both 2024–25 and 2025–26.1Australian Taxation Office. Cents per kilometre method Check the arithmetic. A claim of 4,500 kilometres at 88 cents is $3,960.
Australia’s system runs on self-assessment, so the ATO initially accepts your figures, but the burden falls on you if it later asks questions. If your return is reviewed and you can’t show how you got to your kilometre figure, the whole deduction can be disallowed.6Australian Taxation Office. Records you need to keep Car expense claims are a regular ATO focus area, and claims sitting right at the 5,000-kilometre ceiling with no documented basis are the ones that get flagged. A diary or app log kept during the year, not reconstructed after a review letter, is the strongest position you can be in for a deduction worth up to $4,400.