You can claim car expenses for work-related driving using one of two methods: cents per kilometre, which is 91 cents per kilometre for 2026-27 (capped at 5,000 km), or the logbook method, which claims the business-use percentage of your actual running costs. You choose the one that gives the bigger deduction. One rule applies to both: you cannot claim your normal commute between home and work.
The cents per kilometre method
This is the simple option. You multiply your work kilometres by 91 cents, up to a maximum of 5,000 kilometres per car, giving a maximum claim of $4,550 for 2026-27. The rate covers everything, fuel, servicing, registration, insurance and depreciation, so you cannot claim those on top. You do not need receipts, but you must be able to show how you worked out your kilometres, so keep a simple diary of work trips rather than guessing.
The logbook method
If you drive more than 5,000 work kilometres, or your car is expensive to run, the logbook method usually gives a bigger claim. You keep a logbook for a representative 12 continuous weeks to work out your business-use percentage, then apply that percentage to your actual costs for the year (fuel, servicing, registration, insurance and depreciation). You need to keep the logbook and your receipts.
Which one should you use?
Use cents per kilometre if you drive under 5,000 work kilometres and want simple paperwork. Switch to the logbook method if you drive more than that, have high running costs, or want to maximise the claim. It is worth doing the sums both ways in a big-driving year.
How MS Financial Services can help
We work out the method that gives you the bigger, compliant claim and keep your records right. See our Tax & Compliance service or get in touch.
Frequently Asked Questions
What is the ATO cents per km rate for 2026-27?
It is 91 cents per kilometre, up from 88 cents in 2025-26, capped at 5,000 work kilometres per car, for a maximum claim of $4,550.
Do I need a logbook for the cents per km method?
No, but you must be able to show how you calculated your work kilometres, such as a diary of trips. The logbook method is a separate option for higher claims.
Can I claim driving to and from work?
No. Normal home-to-work commuting is private travel and is not deductible, whichever method you use.
Which method gives a bigger deduction?
Cents per km is simplest for under 5,000 km. The logbook method usually wins if you drive more than 5,000 work km or have an expensive car, because it claims your actual costs.
Can I claim a ute or van?
The cents per km method is for cars (under nine passengers, load under one tonne). Other vehicles use the actual cost method with records.