Under the cents per kilometre method, you can claim up to 5,000 work-related kilometres per car each financial year on your tax return without a formal logbook or fuel receipts. For 2025–26, the ATO rate is 88 cents per kilometre, which caps the deduction at $4,400 per vehicle.1Australian Taxation Office. Cents per Kilometre Method The phrase “without proof” is a bit of a myth, though. You don’t need receipts, but you do need to show the ATO how you arrived at your kilometre figure if they ask.
What “Without Proof” Actually Means
The cents per kilometre method skips the paperwork that the logbook method demands. No receipts for fuel, servicing, insurance, or registration. No 12-week trip log. The flat rate is designed to cover all those running costs in one number.1Australian Taxation Office. Cents per Kilometre Method
What it doesn’t skip is the basic requirement to justify your kilometres. If the ATO reviews your return, they can ask how you calculated the figure, and “I estimated” won’t cut it. If you can’t explain it, they can disallow the whole deduction.
The record they’re looking for is informal. A diary noting the date, destination, and purpose of each work trip is enough. So is a calendar with appointments, a spreadsheet of regular routes and their distances, or a digital trip log app. You’re not documenting fuel purchases or odometer readings — you’re showing that the total reflects real trips.
One point that catches people out: the general $300 substantiation exception for work-related expenses doesn’t apply to car claims. Car expenses have their own rules, and even a small claim needs some basis behind it.2Australian Taxation Office. Records You Need to Keep Keep whatever record you use for at least five years after lodging.
Who Can Use This Method
You need to own or lease the vehicle, and it must qualify as a car under the ATO’s definition: designed to carry fewer than nine passengers and with a carrying capacity under one tonne. That rules out utes with a tonne-plus payload, trucks, minibuses, and motorcycles.3Australian Taxation Office. D1 Work-Related Car Expenses 2025 Both employees and sole traders can use it. If you own more than one car, the 5,000 km cap applies separately to each.
Which Trips You Can Actually Claim
This is where most claims go wrong, and it matters more than the paperwork question. Driving from home to your regular workplace is commuting, and commuting is never deductible, even if you live a long way from work, work irregular shifts, or have no public transport option.4Australian Taxation Office. Trips You Can and Can’t Claim
Trips you can generally claim include:
- Travel between two workplaces during the day, such as from your employer’s office to a client site.
- Travel to alternate locations for meetings, conferences, or training that aren’t at your regular workplace.
- Home-to-work travel when you’re carrying bulky tools or equipment your employer requires, there’s no secure storage at work, and the items are genuinely too large to take on public transport.
- Travel as an itinerant worker with no fixed workplace, such as a contractor moving between sites.
- Travel from home to a workplace when your home is genuinely a base of employment and you’re continuing a specific work task, not just checking email before leaving.
The home-to-work exceptions are narrow and the ATO looks at them closely. If your situation doesn’t clearly fit one of those categories, only count kilometres travelled between work locations during the day.
Working Out Your Deduction
Multiply your work-related kilometres by 88 cents, up to the 5,000 km cap. Someone who drove 3,200 work kilometres claims $2,816. Someone who drove 6,500 is capped at 5,000, so they claim $4,400.1Australian Taxation Office. Cents per Kilometre Method
The flat rate covers fuel, registration, insurance, depreciation, and maintenance. You can’t add any of those on top.
When the Logbook Method Is Worth the Effort
If you’re consistently driving more than 5,000 work kilometres a year, the cents per kilometre method is capping your deduction below what you’d otherwise get. The logbook method has no cap. It lets you claim the business-use percentage of your actual car costs — fuel, servicing, insurance, registration, and depreciation combined.5Australian Taxation Office. Logbook Method
The cost is real paperwork. A logbook running at least 12 continuous weeks recording every trip (date, odometer readings, kilometres, purpose), plus receipts for every car expense across the year. That 12-week period has to be representative of your normal driving. The upside is that once completed, the logbook stays valid for five years.
You can switch methods from one year to the next, and use different methods for different cars.6Australian Taxation Office. Expenses for a Car You Own or Lease If your work driving is well under 5,000 km and your car is cheap to run, cents per kilometre is usually the better deal. If you drive a lot for work or the car is expensive to keep on the road, run the numbers before defaulting to the easy method.
What Happens If the ATO Pushes Back
If a review lands and you can’t show how you calculated your kilometres, the ATO can reverse the deduction. You’d owe the unpaid tax plus interest from the original due date, and a penalty on top. The penalty depends on how they classify the behaviour: 25% of the tax shortfall for failing to take reasonable care, 50% for recklessness, and 75% for intentional disregard.7Australian Taxation Office. Penalties for Making False or Misleading Statements
To put numbers on it: on a $4,400 deduction at a 32.5% marginal rate, the tax shortfall is around $1,430. A 25% penalty adds about $358, plus interest. Not ruinous, but avoidable. A short diary entry after each work trip — date, destination, reason — is all it takes to have the credible basis the ATO is looking for.