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Work related car travelling claims

Work related car travelling claims

If you use your own car for work related travelling, not trips to and from your work, you have the right to claim your car expenses. The deductions due to work-related car expenses are common deductions, and moreover, they are also not complicated to claim.


It is not a new thing that many people have to travel as part of their job. Work related travel is quite common and maybe something which is as simple as a short journey for an hour or a long trip lasting many days. Sometimes, this trip can be overseas as well.


Do you know that the cost you spend on work-related travelling is generally tax-deductible? Laws related to this concept are very complex. ATO (Australian Taxation Office) ensures to keep a close eye on people claiming work related car travelling expenses so that they cannot make incorrect travel claims.


Eligibility requirements for car travelling expenses claims on tax return


If you are using your car for work purposes, whether this car is on leasing or paying off, you can claim for running car travelling expenses. These include:


  • petrol and oil
  • car registration
  • car servicing and repair costs
  • car insurance
  • the cost of damaging another vehicle when met with an accident
  • interest on a car loan (if any)
  • lease payments (in case if you are leasing your vehicle)
  • depreciation (it reduces in value over time)


In addition to this, if you are running a business and have provided any vehicles to your staff as part of their employment, you can claim all the above-given costs.


What can you claim for car travelling expenses?


As per the ATO, you can claim for work related car travelling if you:


  • Go to work related trips/journeys during the day or night.
  • Go to work-related conferences, seminars, or meetings other than your usual place of work.
  • Travel between two workplaces, but none of them should be your home.
  • Travel from one workplace to a different workplace and then get back to the place where you usually work.
  • Travel from your home to a workplace that is not your usual place of work, and then travel back to your usual place of work or directly home.
  • Work at more than one site on a regular basis, which means you have to drive between these different sites before driving home.
  • Have to transport/carry bulky or heavy tools or equipment to and from your workplace, and it is not possible to store these tools or equipment at work.


What can’t you claim for car travelling expenses?


  • As per the ATO, you cannot claim a deduction for work related car travelling expenses if you:
  • Travel from home to work and from work to home, even if there is a long distance between your home and a place of work.
  • If you were reimbursed the total costs by your employer. You can only claim for the amount that you have paid yourself.


What are car deduction methods?


Basically, the work related car travelling expense claims on your tax return can be calculated using two methods.


  • Cents per kilometre method
  • Car logbook method


Cents per kilometre


ATO allows you to claim 72 cents per kilometre for each kilometre you have travelled for work related journeys/trips. For this, it is recommended to keep a record of all work related journeys so that you can calculate the number of kilometres you have travelled for work. The best way is to keep a diary and write everything in it. You can use this method for claims up to 5,000 kilometres per vehicle.


You must also know that if you change your vehicle throughout the year, you have the right to claim 5,000 kilometres for both vehicles.


For example:

If you have travelled 3,500 kilometres in the last year for work duties, you are able to claim a deduction for car expenses of $4,234, i.e. 3,500 x 72 cents.


If every ATO audits, you have to show how you have calculated the kilometres you claimed. Therefore, it is required to keep a logbook that will record your work related use of the vehicle.




If you travel more than 5,000 kilometres per year, you have to use the logbook method. The logbook is an effective way to claim the actual expenses you have incurred in using your vehicle for work purposes. These can be fuel, servicing, insurance, and depreciation. If the claim has a high deduction, it is done using a logbook method.


To take the benefits of this method, you have to keep a logbook from the start, but for just a period of 12 weeks. In this logbook, you will keep the records of your all journeys, whether it is business or private or both. It is so because, at the end of the logbook period, you can calculate the proportion of business use for your car. This proportion is then used to calculate all your car expenses over the year. This logbook is good for five years.


At the same time, you are also required to keep other records, such as receipts or invoices of all expenses you have spent on your car. These will help in claiming the appropriate ‘business use percentage’ of expenses.


For example:

You have travelled 20,000 kilometres in your car in the last year. As per your logbook, it is shown that nearly 60% of the travel was for work related purposes. It means you are eligible to claim a deduction for 60% of your work related car travelling expenses. If the total car expense in the last years was $5,000, you can claim $3,000 as 60% of the total expense.


Always keep in mind that you are not eligible to claim for a home to work travel as it is considered as a private expense. It can only be considered if you carry bulky tools or equipment in your car, which is not safe to store at the workplace. Just take care of one thing that ATO looks at each claim very closely, so never try to mislead them.


One thing that most people overlook is car depreciation. You must consult your accountant to check how to calculate depreciation, as this step can add thousands of dollars to your allowable deductions.


If you are unsure or do not have enough knowledge about how to deal with work related car travelling expenses, you must take the help of a qualified tax accountant for the right guidance.

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