The Australian Taxation Office (ATO) allows people to claim the use of their car for work as a tax deduction. Their rates are reviewed on a yearly basis, so it’s important that you stay up-to-date with the latest rates. The new ATO cents per KM rate for 2022 and 2023 tax year is: 78 cents per km for 2022-23 tax year The ATO allows people to claim up to 5,000km using the cents per km 2022-23 method at the rate of 78 cents per kilometre. The cents per km method is the simplest way to claim your work related car use from the ATO. You can claim a maximum of 5,000 business kilometres annually. Your claim is limited to a set rate, which is 78 cents per kilometre for the 2022 income year. You DO need to keep records to prove that you used your vehicle for work for the number of km claimed. You DON’T need to keep all the individual fuel receipts, insurance receipts, car servicing receipts etc. But, you can’t claim separate deductions for insurance premiums, depreciation and fuel etc. Love it. Saves me so much time recording daily trip data for my car allowance. Phil Baumert, Verified Customer The cents per km method is straightforward for those doing less than 5,000km of work travel per year. Learn More: Find out more details about how to use the cents per km method. What You’ll Learn Toggle What is the Logbook Method, and Can I Use It?Simplify Claiming Deductions Using the GOFAR Logbook App What is the Logbook Method, and Can I Use It? If you are doing more than 5,000km per year for work purposes you may want to check out the logbook method. The logbook method requires more record keeping BUT allows you to claim unlimited km for work purposes. The logbook method is appropriate for sole traders and partnerships—where at least one partner is an individual—claiming work-related deductions for a car. It maximizes the claim deduction amount as it uses your business use percentage to calculate it. The business use percentage is established by dividing your business kilometres (they can be more than 5000), by the total kilometres travelled and multiplying that by 100. For instance, if a business consultant travelled 9,000 kilometres for work-related activities and 15,000 kilometres in total, his business use percentage would be: 9000/15000= 0.6 0.6×100= 60% The claim amount is established by multiplying the business use percentage with the total car expenses during an income year. Let’s say the business consultant’s expenses—fuel, interest on car loan, maintenance, registration, lease payments—total 12,640. Then, he can claim 12,640×0.6= 7,584. Simplify Claiming Deductions Using the GOFAR Logbook App If it’s your first year using a logbook, you must maintain it for 12 continuous weeks. Moreover, to obtain the annual business kilometres and total kilometres travelled, you need to maintain detailed records for every single trip you make. Keeping a printed log sheet is time-consuming and can be tiring as you’ll need to manually record the following for every trip: Start and end dates Reason for the journey Number of kilometres travelled Odometer readings at the beginning and the end of the journey In addition to this, your logbook must contain these records at tax time: Number of kilometres for every journey Total number of kilometres travelled during the logbook period Odometer readings at the beginning and end of the logbook period This is a lot of information to manually keep track of, day in, day out for an entire year. You can simplify the process by using GOFAR. The GOFAR tracker and logbook app work with the leave-in GOFAR device to automatically record your kilometres when you drive. It also includes a feature that allows you to tag trips as either business or personal, and another that enables you to set up location tags and automatically classify trips according to the destination. The ability to easily tag trips helps to maintain organized records and saves you the time you’d spend going through trip records at the end of the year as they are already categorized. It also helps you claim accurate deductions at tax time. Additionally, the automatic location tag feature reduces manual input and the risk of error. With the GOFAR app, you can quickly access your car expense claims using the expense claim summary feature, which offers an easy reference while calculating your claim. And finally, you can report your claims instantly by exporting your spreadsheet records to your email or sharing them with your tax accountant. GOFAR … connects seamlessly … and provides accurate travel data. It can be customised and is useful for fuel economy. Mcistdp, Verified Customer Learn more about how GOFAR can jump in and save time and money. Or get GOFAR today to maximize your car expenses and save hours on your business travel records. Best-Value GOFAR Subscriptions Why the GOFAR app? The GOFAR app boasts of a 4.5-star rating on the App Store. Join over 20,000 users worldwide tracking their travel allowances with our best-value GOFAR subscriptions.