Cents per kilometre method
A simpler car claim — a set rate per business km, capped.
The cents-per-kilometre method lets you claim a flat rate for each business kilometre you drive, up to a yearly cap of 5,000 business kilometres per car. The rate is meant to cover all running costs, so you can’t also claim fuel or servicing separately. No logbook needed, but you must be able to show how you worked out the kilometres.
Worked example
Drive 3,000 business kilometres and you claim 3,000 × the set rate — one line, no receipts for fuel. Drive 12,000 business kilometres and the 5,000 km cap starts costing you, which is when a logbook usually wins.
Common mistake
Assuming “no logbook” means “no records”. You still need a reasonable basis for the kilometres — a diary or app trail — if the ATO asks.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Logbook method (car expenses)
Claim your car’s real business-use share of running costs.
Substantiation (proving a deduction)
The records that turn a claim into a defensible deduction.
Sole trader
The simplest business structure — you and the business are one.
Depreciation (decline in value)
Claiming the cost of a big asset gradually over its life.
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Questions about this term
Cents per kilometre method: common questions
- Can I claim fuel on top of the cents-per-kilometre rate?
- No — the rate is meant to cover all running costs, so fuel, servicing and the rest cannot be claimed separately. It is one line: business kilometres multiplied by the set rate. Drive 3,000 business kilometres and that is the whole claim, with no receipts for fuel to keep.
- Do I need a logbook for the cents-per-kilometre method?
- No logbook, but not no records. You must be able to show how you worked out the kilometres — a diary or app trail is enough — if the ATO asks. “No logbook” is often misread as “no evidence”, and that is the slip to avoid.
- What is the most I can claim per car under cents per kilometre?
- The set rate on 5,000 business kilometres per car per year. Drive 12,000 business kilometres and the cap starts costing you, because the 7,000 above it earn nothing under this method — which is usually the point at which a logbook wins.
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