Logbook Method in Detail

If you drive a vehicle for work-related journeys, you can claim car expenses from the Australian Taxation Office.

You can either use the Cents per Km or Logbook Method, the latter which we’ll explain in detail below.

What is the Logbook Method?

The Logbook Method allows you to make claims related to most expenses, when you use your car for work, meaning you benefit from a bigger tax deduction.

This is achieved by calculating your tax deduction based on expenditure and the percentage of kilometres travelled over a certain period, for business purposes, over a consecutive 12-week period.

How Does the Logbook Method Work?

You need to record your mileage everytime you drive your car, whether for work or for personal reasons, for 12 consecutive weeks.

You will need a form of logbook, on which you will record all the required details and store detailed records of your expenses.

Download a template here, buy a physical logbook from your local newsagent, create a spreadsheet on your device, or download GOFAR All-in-1 Logbook Tracker app.

Understanding the 12-week Period

You must decide the best time to start logging your details, taking into account the mandatory period of 12 consecutive weeks.

It is important that you pick a period of time which is representative of your personal and work-related travel throughout the year. If you are due to go on holiday, it may be best to start your logbook on your return and once you resume your typical activities.

You can start using the Logbook Method even if your income year ends in less than the 12 consecutive week period – just simply continue logging your details into the new income year, until you have covered 12 continuous weeks.

How Often Do I Need to Log My Details?

Once you start logging your details, it is important that you continue to do so every day and every time you use your vehicle over a consecutive 12-week period. When the 12 week-period is over, you can stop recording your details.

Using the GOFAR All-in-1 Logbook Tracker app makes this process much easier. Once you have downloaded the app, simply plug in the adaptor and your mileage is automatically logged every time you drive your car. At the end of your journey, swipe right to record your journey as work-related.

You can use the same information each time you fill in your tax return, for a 5 year period, from the first log date.

Once your 5 year period is over, you must start a new logbook in exactly the same way, for another 5 year period.

What Information Should My Logbook Contain?

  1. The start and end date of your logbook period
  2. The make, model, engine capacity and registration number of your vehicle
  3. The start and end odometer readings of each subsequent income year, in which you make a tax claim
  4. Your vehicle’s start and end odometer reading for your logbook period
  5. The total number of kilometres travelled
  6. The business use percentage

Recording Daily Details

  1. The start and end odometer readings for every journey you make, whether for business or personal reasons
  2. The number of kilometres travelled for each journey. If you make 2 or more trips, you can record the distance as a single journey
  3. The reason for making the journey, ie: disclose what the trip was for (business or personal)
  4. The date of each journey you make

What Else Can I Claim?

The Logbook Method permits tax deductions on a wide range of vehicle expenses related to work. In order to make these claims, you must keep detailed records of permissible claims, in the form of receipts, tax invoices, bank statements, loan or lease documents, insurance certificates and registration papers. You can make claims on:

  1. Fuel and oil
  2. Electricity costs in the case of electric cars
  3. Repairs and service
  4. Depreciation
  5. Registration
  6. The interest on a loan taken to purchase your vehicle
  7. Your vehicle’s insurance premium
  8. Lease payments if you do not own your vehicle

What Types of Vehicles are Covered?

The ATO recognises and uses the following definitions for permissible vehicles (including all electric vehicles):

  • Cars – motor vehicles which are designed to carry fewer than 9 passengers and less than a tonne
  • Motorcycles – motor vehicles with 2 wheels, designed to carry not more than 1 passenger and less than a tonne
  • Utility Trucks / Panel Vans – motor vehicles which are designed to carry more than a tonne
  • Minivans / People Service Carriers – motor vehicles which are designed to carry more than 9 people

You can use the Logbook Method for more than 1 car, even if you get a new car during the 5 year period that your logbook is valid. Each car must have its own logbook, used in the same way. You must ensure that the consecutive 12-week period is the same for all your cars.

The GOFAR All-in-1 Logbook Tracker app is only compatible with vehicles registered from 2007.

Change of Circumstance?

It all depends on how your work-related travel may have been affected.

If you start a new job, which doesn’t affect your work-related travel, you can continue with the same details and the same logbook.

However, if your new job role affects the way you use your vehicle, you may need to start a new logbook.

How to Calculate Your Tax Deduction Manually

If you have been keeping a manual logbook via a spreadsheet or Logbook notepad, you can start the claim process. (If this sounds like a terrible idea, download GOFAR.)

Now that you have logged all the relevant information, have kept detailed records of expenses for the year and have a consecutive 12-week log, you are ready to submit your vehicle expense claim when you fill out your tax return at the end of your income year.

To do this, you need to calculate your work-related use percentage (WRuP).

The calculation follows an exact formula:

  1. divide the distance travelled for business, by the total distance travelled (over the 12-week period), then times that number by 100 = BuP
  2. add up your total car expenses for the same period = TCE
  3. multiply your business use percentage x your total car expense

BuP X TCE = WRuP

For example:

Your logbook shows that the total number of kilometres which you have travelled in your vehicle is 10,000kms.

Through your records, you can see that of those 10,000kms, 4,000kms were work-related. Your substantiated records show that your car expenses amount to $9,000 for the income year.

4,000km / 10,000km = 0.4

0.4 x 100 = 40% of your driving was business related

$9,000 x 40% = $3,600

You can claim $3,600

The GOFAR All-in-1 Logbook Tracker will calculate your claims automatically for you, providing you have recorded all the correct details during the period concerned.