Car Expense Deduction Calculator (Australia)

This car expense deduction calculator compares the ATO cents-per-kilometre and logbook methods for your work car, finding the better deduction and tax saved.

Car Expense Deduction Calculator (Australia)
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Best deduction —
Cents-per-kilometre method —
Logbook method —
Logbook advantage —
Tax saving above the standard deduction —
Kilometres you can claim —
Kilometres above the cap —
Rate per kilometre (cents) —
Annual kilometre cap —
Running costs plus depreciation —
Claim above the standard deduction —
Standard deduction floor —
Marginal rate used —

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

What it does

The Car Expense Deduction Calculator compares the ATO cents-per-kilometre and logbook methods for a work car, shows which gives the larger deduction, and estimates the tax it saves at your marginal rate.

Data sources & parameters

The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.

ParameterValueSourceLast updated
Cents-per-kilometre car deduction rate0.91ato.gov.auEffective 2026-07-01Corrected 2026-08-27: 0.88 to 0.91 (official-verified)
Cents-per-kilometre annual kilometre cap5,000ato.gov.auEffective 2026-07-01Maximum business kilometres claimable under cents-per-km method
Resident income tax bracketsRate scheduleato.gov.auEffective 2026-07-01FY2026-27 rates (15% on $18,201-$45,000). Ends 2027-06-30: the scheduled 2027-07-01 row (14%) takes over. audit 2026-09-23
Medicare levy rate0.02ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
Medicare levy low-income threshold28,011ato.gov.auEffective 2025-07-01Window opened: the threshold is indexed annually and there is no successor row, so closing it at 2027-06-30 would have fallen back to the undated 26,000 row
Standard deduction for work-related expenses (annual cap)1,000legislation.gov.au, ato.gov.auEffective 2026-07-01New 2026-10-23: ITAA 1997 s 25-130 (Act No. 49 2026 Sch 4) gives a resident with labour income the lesser of 1,000 and that income, less work expenses already claimed, from 2026-27

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

The formula

Cents per km = min(business km, cap) × rate; Logbook = (running costs + decline in value) × business-use %

How it works

It caps your business kilometres at the annual limit and applies the published per-kilometre rate, then works out the logbook claim as your business-use percentage of running costs plus decline in value, and takes the larger of the two.

Where it is used

  • Choosing between the cents-per-kilometre and logbook methods
  • Checking how many business kilometres fall above the cap
  • Estimating the tax saving on a work-car claim

Worked example

On 4,000 business kilometres with A$9,000.00 of running costs at 60% business use, cents per kilometre gives … and the logbook gives …, so the better claim is … and saves about … in tax.

What the car expense deduction calculator does

The car expense deduction calculator compares the two methods the ATO allows for claiming work-related car expenses in Australia and shows which one leaves you better off. You enter your business kilometres, your total running costs for the year and your logbook business-use percentage, and the tool returns the deduction under the cents-per-kilometre method, the deduction under the logbook method, the difference between them, and an estimate of the tax the larger claim saves at your marginal rate.

Car expenses are one of the biggest work-related deductions claimed in Australia and one of the most closely reviewed. Choosing the right method, and being able to back it up, is worth real money at tax time.

The two methods, side by side

The cents-per-kilometre method is the simple one. You multiply the business kilometres you travelled by a set rate the ATO publishes each year, up to an annual cap per car. That rate is designed to cover everything: fuel, servicing, tyres, registration, insurance and the car's decline in value, all rolled into one figure. You do not need receipts for the running costs, but you do need to be able to show how you worked out the kilometres, a diary, a roster, an app, or a pattern of regular trips.

The logbook method is the detailed one. You keep a logbook for a continuous twelve-week period that is representative of your year, which establishes your business-use percentage. You then total the actual costs of running the car for the whole year and claim that percentage of them, plus the same percentage of the car's decline in value. There is no kilometre cap, so the more you drive for work, the more the method is worth.

For someone driving 4,000 business kilometres with A$9,000 of running costs and 60% business use, the cents-per-kilometre method gives about A$3,640 while the logbook gives A$5,400, a difference of roughly A$1,760 in deduction, or several hundred dollars of tax.

How the calculation works

The tool follows the same steps the ATO does:

  • It caps your business kilometres at the annual limit and multiplies the claimable kilometres by the published rate to get the cents-per-kilometre deduction.
  • It adds the car's decline in value to your total running costs and multiplies by the business-use percentage to get the logbook deduction.
  • It takes the larger of the two as the best deduction and reports the gap between them.
  • It applies your marginal rate, including the Medicare levy, to estimate the tax saved.

Note that decline in value is added only to the logbook side. The cents-per-kilometre rate already includes depreciation, so adding it again would double-count.

The kilometre cap and who it affects

The cap is the single feature that decides the method for most people. Under the cents-per-kilometre method you can claim only up to a set number of business kilometres per car per financial year. Drive fewer than that and the method is a genuinely easy way to make a fair claim. Drive more and every additional kilometre is worth nothing under that method, while the logbook keeps counting.

The tool shows the kilometres above the cap separately for exactly this reason. If that number is large, a logbook is almost certainly worth the twelve weeks of effort. The cap applies per car, so if you used two cars for work you assess each one on its own.

What you can and cannot claim

Business kilometres are trips you make in the course of doing your job. Travelling between two separate workplaces, driving to a client, a supplier or a training course, and carrying bulky tools you genuinely cannot leave at work all qualify. Home-to-work travel does not, in almost all cases, even if you live a long way from the office, work irregular hours, or stop briefly on the way.

Under the logbook method, running costs include fuel, oil, servicing, repairs, tyres, registration, insurance, and the interest component of a car loan or lease. They do not include fines, private tolls and parking, or the capital cost of the car itself, that is claimed through decline in value instead. If your employer reimburses a cost, you cannot claim it.

A practical point on records: the ATO expects evidence. For the logbook method that means the twelve-week logbook, odometer readings at each year end, and receipts. For cents per kilometre it means a defensible basis for the number of kilometres. An estimate that happens to land exactly on the cap every year attracts attention.

Reading your result

The output shows both methods, the better of the two, and the gap between them. Where the logbook advantage is negative, the cents-per-kilometre method is ahead, which typically happens when business use is low or running costs are modest. The chart puts the two figures side by side so the choice is obvious at a glance.

The tax saving is an estimate. It applies the marginal rate for the taxable income you entered, including the Medicare levy, to the larger deduction. Your real benefit depends on your full return, other deductions and any offsets, so treat the figure as a guide to the size of the prize rather than a precise refund.

When to use this tool

This calculator is helpful when you want to:

  • Decide whether keeping a logbook is worth the effort this year.
  • Compare both methods before lodging your return.
  • See how many of your business kilometres fall above the cap.
  • Estimate the tax benefit of a work-car claim at your marginal rate.

Run it at the start of the year as well as the end. If the logbook method looks clearly better, starting a twelve-week logbook early is the difference between claiming it and missing it. Confirm your entitlement and your records with a registered tax agent before you lodge.

This is general information only and not financial advice.

About This Car Expense Deduction Calculator

Use this car expense deduction calculator to get an instant, accurate estimate. The figures follow official ATO guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.

Tax year 2026

Frequently asked questions

Which car expense method should I use?
Whichever gives the larger deduction and that you can substantiate. Cents per kilometre needs only a reasonable record of your business kilometres but is capped, while the logbook method has no cap and usually wins for heavy business use, provided you have kept a valid twelve-week logbook and your receipts.
What is the kilometre cap?
The cents-per-kilometre method is limited to a set number of business kilometres per car per financial year. Kilometres above the cap simply do not add to the deduction under that method, which is why heavy business drivers are usually better off with a logbook.
What counts as a business kilometre?
Travel between two workplaces, to a client or supplier, to a conference, or carrying bulky work equipment you cannot leave on site. Ordinary travel between home and your regular place of work is private and does not count, even if you work outside normal hours or make a small detour.
What can I include in running costs?
Under the logbook method you total the actual costs of the car for the year: fuel, servicing and repairs, tyres, registration, insurance, and the interest on a car loan or the finance charge on a lease. You then claim the business-use percentage of that total, plus the same percentage of the car's decline in value.
Do I need a logbook every year?
A valid logbook covers a continuous twelve-week period and is generally good for five years, as long as your pattern of use has not changed materially. You still need to record the odometer reading at the start and end of each year, and keep the receipts for the costs you are claiming.
Is my data private?
Yes. The calculation runs entirely in your browser, so nothing you enter is uploaded, stored, or shared.
How does the calculator work out the result?
The tool follows the same steps the ATO does: It caps your business kilometres at the annual limit and multiplies the claimable kilometres by the published rate to get the cents-per-kilometre deduction.It adds the car's decline in value to your total running costs and multiplies by the business-use percentage to get the logbook deduction.It takes the larger of the two as the best deduction and reports the gap between them.It applies your marginal rate, including the Medicare levy, to estimate the tax saved. Note that decline in value is added only to the logbook side.

About the author

Taha Kheirandish

Written and reviewed by

Taha Kheirandish

Economics student and independent researcher

Taha Kheirandish reads tax codes the way other people read maps — to find out where a system actually leads, not where it claims to go.

He is an economics student, and his work here is comparative by design. A pension deferral bonus in Quebec, a commuting allowance in Germany, a rent-increase ceiling in the Netherlands: each is a decision a government made about how money should move, and each reads differently once you set it beside eight others. He builds and checks these calculators across nine markets from primary sources — the regulation rather than a summary of it, the ministry’s own circular rather than a news item quoting it.

That is the editorial standard of the site as well as his habit. Every rate, threshold and bracket here carries the document it was read from and the date it takes effect, and gets re-checked when the law moves rather than when someone happens to notice.

He is a researcher, not a licensed adviser, and nothing on this site is personal financial advice. It is arithmetic done carefully with its sources shown — so that you can check it, and take it to someone who is.

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