What Is the ATO Travel Allowance per KM Rate for 2022-2023?

Home » What Is the ATO Travel Allowance per KM Rate for 2022-2023?

The Australian Taxation Office (ATO) allows you to claim the use of your car for work as a tax deduction. But are you aware of what the updated ATO travel allowance cents per KM 2023 is?

The rates are reviewed regularly and the ATO applied a new rate for the 2022 and 2023 tax years.

The rate for the financial tax year of 2022/23 is:

The ATO allows people to claim up to 5,000km using the cents per km method at the rate of 78 cents per km.

By reading this article, you will learn:

  1. The cents per km method for claiming work-related vehicle use has a maximum 5,000km claim and $3,900 cap.
  2. You can claim upto 1,200 km as regular visits to clients or customers under work-related vehicle use in 2023.
  3. The logbook method allows unlimited driving kilometers for work purposes. No more than 8 passengers.

Easy, Affordable GOFAR Subscription

Try the GOFAR app today


Perfect for drivers who cover more than 5,000 km a year for work purposes.

  • Automatically records every trip
  • Classifies business trips with a swipe
  • Records everything such that you only choose the best 12-week period to claim.
Try the GOFAR app

What Are the Benefits of the Cents Per Km 2023 Method?

The cents per km method is the simplest way to claim your work-related vehicle use from the ATO. It saves you time because it doesn’t require detailed record keeping.

It also includes easy calculations to ascertain the claimable deduction amount. To calculate your deduction, simply multiply the number of total business kilometres by the price per km for the year.

However, one may only use this method if they are a sole trader or in a partnership where at least one of the partners is an individual.

Furthermore, they must be claiming deductions on a car which the ATO defines as motor vehicles, including 4-wheel drives that are specifically built to transport:

  • A cargo weighing under one tonne.

What You Need to Know About the Cents per KM Method

  • You can claim a maximum of 5,000 business kilometres annually.
  • You can ONLY claim a maximum of $3,900 this year.
  • Your claim is limited to a set rate, which is 78 cents per kilometre for the 2022/23 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.

The cents per km method is the simplest and easiest method for Australians who drive less than 5,000km of work travel per year.

You will need to keep the following records to substantiate your claim:

  • Information on the distance covered for both work and personal purposes.
  • Documentation for expenses related to fuel, oil, maintenance, services, and insurance.
  • Documentation pertaining to loans or leases and tax invoices.
  • Vehicle registration documents.
  • Explanation of how you computed your deduction e.g., calendar or diary records.

What Are the Drawbacks of the Cents per KM Method

Though the cents per km method offers simplicity and time-saving benefits, it may not be beneficial for everyone.

If you travel extensively for work, you may find that you’re consistently driving more than 5000km annually.

Additionally, if your car incurs high expensive costs due to its make and model or type of fuel it uses, you might find that the actual vehicle expenses exceed what you can claim via the cents per km method. This is because you cannot claim expenses separately via this method.

Since the cents per km method offers a flat rate per km, it may not adequately cover the actual costs of running and maintaining your vehicle.

The table below showcases example work-related vehicle use in 2023 that you can include in your claim and the amount due based on the total kilometres driven.

Work-Related Vehicle Use Kilometres Driven
Travel to client meetings (once a month) 600 km
Daily commute to a temporary work location (for a week) 250 km
Travel between two jobs (occasionally) 300 km
Attending training and conferences (twice a year) 400 km
Delivering goods or transporting equipment (monthly) 200 km
Traveling from your regular workplace to an alternate workplace (few times) 300 km
Visiting clients or customers (regularly) 1,200 km
Travel for work-related errands (e.g., post office, bank) (weekly) 200 km
Miscellaneous short trips for work 500 km
Total 3,950 km

To calculate the claimable amount, we need to multiply the total business kilometres by the current rate, which is 78 cents per kilometre.

So the claimable amount for the income year is 3,950 km x $0.78/km = $3,081.

Bonus: If your employer reimburses you for business mileage using a cents-per-km method, you cannot claim business mileage deductions on your taxes, as you’ve already been properly reimbursed for it

Do You Want to Claim More Than 5,000km This Year? You Need the Logbook Method

If you are driving more than 5,000km per year for work purposes definitely check out the logbook method.

The ATO logbook method requires more record keeping BUT allows you to claim unlimited driving kilometres for work purposes. For example, if you drive 10,000 kilometres you could claim $5,760 or more. Check the calculations here.

You can claim more than the limited cents per km 2022 allowance, which is capped at $3,900 this year.

In fact, the easiest way to keep records and claim back tax money is with the GOFAR app. It costs a few dollars a month, and is tax-deductible.

Great app. Super handy to use, keeping track could not be any easier. Best investment I’ve made. No more paperwork and online information for end of tax year reports. Nathan Whalley, Verified Customer, Mar 2021

Great app and loving the device. It’s going to make tax time so much easier. App notifications are annoying though, so I’ve turned those off. Liz Johnston, Verified Customer, May 2022

The GOFAR app boasts of 400+ 5-star reviews on the Google Playstore. Find out why other buyers find the biennial GOFAR subscription as the best value for money now.

The following table compares the cents per km method to the logbook method.

Aspect Cents Per KM Logbook Method
Eligibility All taxpayers All taxpayers
Maximum km claimable 5,000 km Unlimited
Record keeping required Minimal Extensive
Claimable expenses Set rate per km Actual expenses including depreciation
Ease of use Simple Complex

Compare the top 5 best logbook apps to decide which one is most convenient for your needs.

Now that you’ve settled on the ATO logbook method, consider our selection of GOFAR subscriptions.

Interested? Learn more about how GOFAR can benefit you. Or get GOFAR today and start counting your tax-return blessings.

With a 4.5 star rating on the App Store, join over 20,000 users worldwide tracking their travel allowance deductions with our best value GOFAR subscription.

Danny Adams sitting in a chair with a laptop

Danny Adams

Co-founder of GOFAR and with a Computer Science background from Harvard University, and a Bachelor of Aerospace, Aeronautical & Astronautical Engineering (Honours), UNSW. I want to transform data from cars into useful services so -> drivers save time & money -> emissions fall -> Australian roads are safer. So we built an ATO-compliant logbook app called GOFAR. I write to help you understand how to use GOFAR to maximise business travel. Reach out via support@gofar.co.

Related Posts

This content is provided for general information purposes only and does not constitute professional advice from GOFAR. We recommend consulting with an independent legal, taxation, or financial expert to ensure the information is applicable to your specific situation. Please note that relevant regulations and laws may evolve over time.
Check Car Buy Now