The Australian Taxation Office (ATO) allows people to claim the use of their car for work as a tax deduction. The rates are reviewed regularly and they applied a new rate for the 2021 and 2022 tax years. The rate for 2022/23 is:
78 cents per km for 2022/23
The ATO allows people to claim up to 5,000km using the cents per km method at the rate of 78 cents per km.
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.
The cents per km method is simple and great for those doing less than 5,000km of work travel per year.
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.