What You Can and You Can’t Claim – Vehicle and Travel Expenses

VEHICLE AND TRAVEL EXPENSES

The ATO allows you to claim vehicle and travel expenses only in certain cases, even your normal trips between home and work. Check here all the cases you can claim vehicle and travel expenses and if you are eligible or not.

The first thing to have in mind is to keep a record of all your travel expenses, including car, fuel and parking. Learn here how to calculate your car expenses.

TRAVELS BETWEEN HOME AND WORK


Trips between home and work are generally considered private travel. In some circumstances, you can claim a deduction for travel between home and work, as well as for some travel between two workplaces.

If your travel was partly private, you can only claim what you incurred in the course of performing your work duties.

You can claim the cost of travelling:

✅ Directly between two separate workplaces – for example, when you have a second job (if one of these places isn’t your home).

✅ From your normal workplace to an alternative workplace that is not a regular workplace (for example, a client’s premises) while still on duty, and back to your normal workplace or directly home.

✅ If your home was a base of employment – you’re required to start your work at home then travel to a workplace to continue your work for the same employer.

✅ If you had shifting places of employment – you regularly work at more than one site each day before returning home.

✅ From your home to an alternative workplace that is not a regular workplace for work purposes, and then to your normal workplace or directly home. This doesn’t apply where the alternative workplace has become a regular workplace.

✅ If you need to carry bulky tools or equipment that your employer requires you to use for work which you can’t leave at your workplace – for example, an extension ladder or a cello.

You can’t claim the cost of driving your car between work and home just because:

❌ You do minor work-related tasks – for example, picking up the mail on the way to work or home.

❌ You have to drive between your home and your workplace more than once a day.

❌ You are on call – for example, you are on stand-by duty and your employer contacts you at home to come into work.

❌ There is no public transport near where you work.

❌ You work outside normal business hours – for example, shift work or overtime.

❌ Your home was a place where you ran your own business and you travelled directly to a place of work where you worked for somebody else.

❌ You do some work at home.

VEHICLE EXPENSES


If you use your own vehicle in performing your work-related duties (including a car you lease or hire), you may be able to claim a deduction for car expenses.

If the travel was partly private, you can claim only the work-related portion.

This information relates to car expenses only. A car is defined as a motor vehicle (excluding motor cycles and similar vehicles) designed to carry a load less than one tonne and fewer than nine passengers. Many four-wheel drive vehicles are included in this definition.

If you use someone else’s car for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense (see Other travel expenses).

For other vehicles (that are not cars), see Other travel expenses. Other vehicles include:

Motorcycles

Vehicles with a carrying capacity of:

One tonne or more (such as a utility truck or panel van)
Nine passengers or more (such as a minivan).
When working out your claim, you need to use the actual costs of your motor vehicle expenses. You need to keep receipts for the actual costs you incur such as petrol and oil. You can use a logbook or diary to separate private use from work-related trips.

You can claim a deduction for work-related car expenses if you use your own car in the course of performing your job as an employee – for example, to:

✅ Carry bulky tools or equipment (such as an extension ladder or cello) that your employer requires you to use for work and there is no secure storage available at work.

✅ Attend work-related conferences or meetings away from your normal workplace.

✅ Deliver items or collect supplies.

✅ Travel between two separate places of employment, but not if one of the places is your home (for example, when you have a second job).

✅ Travel from your normal workplace to an alternative workplace (that isn’t a regular workplace) back to your normal workplace or directly home.

✅ Travel from your normal workplace or your home to an alternative workplace that is not a regular workplace – for example, a client’s premises

✅ Perform itinerant work.

If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return. The amount of the allowance is usually shown on your payment summary or income statement.

You can’t claim a deduction for car expenses that have been salary sacrificed or where you have been reimbursed for these expenses.

❌ For motorcycles and other vehicles (that are not cars), you can’t claim work-related deductions under car expenses. However, you may be able to claim for work-related deductions under travel expenses (see Other travel expenses). You can only claim your actual expenses for these vehicles. You must use the logbook method to show your work-related use.

How To Calculate Your Car Expenses

If you use your own car for work purposes, you can claim a deduction using the cents per kilometre method or logbook method. If you use someone else’s car for work purposes, you can only claim for direct costs you pay for – such as fuel.

You can claim your vehicle expenses if:

✅ You use your car in the course of performing.

✅ Your work duties you attend work-related conferences or meetings away from your normal workplace.

✅ You travel directly between two separate places of employment and one of the places is not your home.

✅ You travel from your normal workplace to an alternative workplace and back to your normal workplace.

✅ You travel from your home to an alternative workplace and then to your normal workplace.

✅ You perform itinerant work.

You can’t claim your vehicle expenses if:

❌ You can’t claim a deduction for normal daily journeys between home and work except in limited circumstances where you carry bulky tools or equipment (such as an extension ladder or cello) that: 1. your employer requires you to use for work 2. you cannot leave at work

❌ If travel is partly private, you can only claim the work-related portion.

❌ You can’t claim a deduction for car expenses that have been salary sacrificed.

❌ You can’t claim a deduction if you have been reimbursed for it.

YOU CAN CALCULATE YOUR CAR EXPENSES IN TWO WAYS: CENTS PER KILOMETRE METHOD AND LOGBOOK METHOD

CENTS PER KILOMETRE METHOD


🔘 You can claim a maximum of 5,000 business kilometres per car, using this method.

🔘 Your claim is based on 68 cents per kilometre.

🔘 You don’t need written evidence but you need to be able to show how you worked out your business kilometres (for example, by producing diary records of work-related trips).

LOGBOOK METHOD


🔘Your claim is based on the businessuse percentage of expenses for the car.

🔘 Expenses include running costs and decline in value. You can’t claim capital costs, such as the purchase price of your car, the principal on any money borrowed to buy it and any improvement costs (eg, adding paint protection and tinted windows).

🔘To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period. The logbook period is a minimum continuous period of 12 weeks.

🔘 You can claim fuel and oil costs based on your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you used the car during the year.

🔘 You need written evidence for all other expenses for the car.

Your vehicle is not considered a car if it is a motorcycle or a vehicle with a carrying capacity of:

❌ one tonne or more, such as a utility truck or panel van

❌ nine passengers or more, such as a minivan.

Keep receipts for your actual expenses. You cannot use the cents per kilometre method for these vehicles. While it is not a requirement to keep a logbook, it is the easiest way to show how you have calculated your work-related use of the vehicle.

KEEPING A LOGBOOK


Your logbook must cover at least 12 continuous weeks. If you started using your car for work-related purposes less than 12 weeks before the end of the year, you can extend the 12-week period into the next financial year.

If you are using the logbook method for two or more cars, keep a logbook for each car and make sure they cover the same period.

Your 12 week logbook is valid for 5 years. However, if your circumstances change (eg, you change jobs) and the logbook is no longer representative, you will need to complete a new 12 week logbook.

Your logbook can be electronic or paper. The example below has the details you need to keep.


CALCULATE YOUR WORK-RELATED CAR USE


Complete this section after 12 continuous weeks of logbook use

Logbook period (dd/mm/yy to dd/mm/yy)

1️⃣ Calculate the total number of kilometres travelled during the logbook period: x,xxx km

2️⃣ Calculate the number of kilometres you travelled in the course of earning your income during the logbook period: x,xxx km

3️⃣ Calculate the work-related use by dividing the amount at (b) by the amount at (a). Multiply this figure by 100.

YOUR BUSINESS USE PERCENTAGE IS: XX%

Once you’ve calculated your business use percentage, multiply it by your car expenses to figure out your claim.

Car expenses can include running costs such as fuel, oil, and servicing, registration, insurance and vehicle depreciation. You can claim fuel and oil costs based on receipts or you can estimate the expenses based on odometer records that show readings from the start and end of the period you used the car during the year.

You need written evidence for all other expenses for the car.