Cents Per Kilometre or Logbook Method: Which Is Better?
Cents per kilometre or logbook? Compare the two methods for claiming work-related car expenses and understand which may be appropriate for you.
If you use your car for work, there are generally two methods available to calculate your deduction: the cents per kilometre method and the logbook method.
The right method will depend on how much you use your car for work, the costs of running the vehicle and the records you have available.
When Can You Claim Car Expenses?
You may be able to claim car expenses where you use your own car in performing your employment duties.
This can include travel between separate workplaces, travelling to an alternative workplace for work purposes or travelling as part of performing your employment duties.
Ordinary travel between your home and regular workplace is generally considered private and cannot be claimed, although limited exceptions can apply.
1. Cents Per Kilometre Method
The cents per kilometre method provides a relatively straightforward way to calculate work-related car expenses.
For the 2025–26 financial year, the rate is 88 cents per work-related kilometre, with a maximum claim of 5,000 work-related kilometres per car.
This means the maximum deduction under this method for 2025–26 is $4,400.
From 1 July 2026, the rate increases to 91 cents per kilometre for the 2026–27 financial year, providing a maximum potential deduction of $4,550.
The rate incorporates the costs associated with owning and operating the car, including:
Fuel and electricity
Registration and insurance
Servicing and repairs
Decline in value
You cannot claim these costs separately when using the cents per kilometre method.
While you do not need receipts for each individual car expense, you must be able to demonstrate how you calculated your work-related kilometres. This may include diary records, calendar entries or other supporting evidence.
2. Logbook Method
The logbook method allows you to claim the work-related percentage of your actual car expenses.
Depending on the vehicle, the amount of work-related travel and the costs incurred, this may result in a larger deduction than the cents per kilometre method.
Expenses that may be included can include:
Fuel or electricity
Registration
Insurance
Servicing and repairs
Decline in value
Other eligible vehicle running costs
Your work-related percentage is generally established using a valid logbook maintained for a continuous 12-week period that is representative of your usual travel.
The logbook should record each journey, including the:
Date of travel
Odometer readings at the beginning and end of the journey
Kilometres travelled
Reason for the journey
Odometer readings should also be recorded at the beginning and end of the logbook period.
A valid logbook can generally be used for 5 years, provided your pattern of vehicle use has not changed materially. You must also retain the required evidence for the actual vehicle expenses being claimed.
Which Method Is Better?
There is no single method that will produce the best result for everyone.
The cents per kilometre method may be suitable where work-related travel is relatively modest and you prefer simpler record keeping.
The logbook method may be worth considering where you use your vehicle extensively for work, have significant running costs or regularly travel more than 5,000 work-related kilometres each year.
Importantly, the method producing the largest deduction is not necessarily obvious. The result will depend on the vehicle’s running costs, work-related percentage and kilometres travelled.
Where the records are available, comparing both methods can help determine the most appropriate claim.
Keeping the Right Records
Whichever method you use, maintaining appropriate records is important.
The ATO may require you to substantiate both the work-related nature of the travel and the basis on which your deduction has been calculated.
Keeping records throughout the year is generally much easier than trying to reconstruct work-related travel at tax time.
Contact Us
Unsure whether the cents per kilometre or logbook method is more appropriate for you?
Speak with a member of the PRATT Partners team to review your work-related car use and determine the appropriate method for your circumstances.
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