Work-Related Motor Vehicle Expenses

You may be able to claim a tax deduction for motor vehicle expenses if you have used your vehicle for work-related purposes.

Some examples of when you can claim a deduction for motor vehicle expenses are

• Travel from your regular place of work to a client meeting
• Travel from your regular place of work to a conference
• Travel between two separate places of employment (eg if you have a second job)

You generally cannot claim for travel between home and your regular place of work. You also cannot claim a deduction for travel directly between home and a client meeting.

If you are required to carry bulky or heavy tools and equipment for work and there is no secure storage for the items at your workplace you may be entitled to claim for travel between home and work.

You can’t claim a deduction for vehicle expenses that have been reimbursed by your employer.

Types of Motor Vehicles

The ATO classifies motor vehicles into two categories.

Cars – A car is a motor vehicle (excluding motorcycles and other similar vehicles) that carry less than nine passengers and loads less than one tonne.

Other Vehicles – Other vehicles are those not classified as a car for example motorcycles, scooters, vehicles designed to carry more than nine passengers and vehicles with greater than one tonne load capacity.

Methods to calculate your expenses

If your vehicle is classified as a car there are two methods you can use to calculate your deduction. The cents per kilometre method or the logbook method.

If your vehicle is classified as an other vehicle you can only calculate your deduction using the logbook method.   For example if you used a motorcycle to travel between two work sites you would need to keep a log book of your travel if you want to claim a deduction.

• Cents per kilometre method

Using the cents per kilometre method to calculate your deduction you multiply the total work related kilometres travelled by a set rate advised by the ATO. You can claim up to a maximum of 5,000 kilometres under this method

For the 2022 year the ATO rate is 72 cents per km.

You need to keep records such as a diary records showing the purpose of the travel and the kilometres travelled.

• Logbook Method

Using the logbook method you calculate the work related percentage of your total costs of owning and running your vehicle for the year. Expenses will include fuel, servicing and repairs, registration, insurance, decline in value and interest on financing to purchase the vehicle.

To work out the work related percentage you must keep a valid logbook for a minimum of 12 continuous weeks. The logbook must contain a record of your opening and closing odometer readings for the period and details of your work related travel including purpose and kilometres travelled.

Fuel can be claimed on either your actual receipts or an estimate of expenses based on your odometer reading at the start and end of the year.

You can keep either a paper or electronic logbook. Your logbook will be valid for a period of 5 years, unless your circumstance change such as moving house or changing jobs.

For More Information

For more information on the work-related motor vehicle expenses or for assistance in determining what is classified as an expense, contact your Archer Gowland Redshaw adviser on (07) 3002 2699 | info@agredshaw.com.au.