Car expenses

Compare a set amount per work kilometre with a logbook. Claim one method for each car.

1 The car

Cents per kilometre allows up to 5,000 work kilometres. Claim one method per car.

2 Result

The larger claim is about $1,600. It saves about $512 in tax.

  • Cents per kilometre$874
  • Logbook$1,600
  • Tax saved$512
See the detailed breakdown

The logbook method is the larger deduction on these figures.

Cents per kilometre, 91c$873.60
Tax saved by cents per kilometre$279.68
Logbook method$1,600.00
Tax saved by the logbook$512.00

The tax saved uses 2026–27 resident rates, including the low income tax offset and the usual Medicare levy. There is no student loan in this comparison. The tax saved is smaller than the claim.

Rates last checked 22 October 2026. The 91 cent rate is the tax office rate for 2026–27. The 2024–25 and 2025–26 rate was 88 cents.

Questions

What is the kilometre cap?

The cents per kilometre method allows at most 5,000 business kilometres per car for the year. Kilometres above that are ignored. The logbook method has no 5,000 kilometre cap.

Which rate is used?

2026–27 is 91 cents per kilometre. The ATO rate for 2024–25 and 2025–26 was 88 cents. The 91 cent rate includes a one-off 2 cent increase on top of indexation for 2026–27.

Can the tax saving be larger than the deduction?

No. The saving is the tax and Medicare levy you no longer pay. At the top resident rate that is well under half the deduction. This page uses resident rates with the standard Medicare levy.

Sources

Rates last checked 22 October 2026. How the numbers are worked out.