What Car Expenses Can You Actually Claim on Tax in Australia?

"Can I claim this?" is the question that comes up most at tax time, and for car expenses the honest answer is: it depends on the trip, the method you use, and whether you can back it up.

First: does the trip even qualify?

Before any expense is claimable, the trip has to be work-related. Travelling between two workplaces, to a client or job site, to a conference, or carrying bulky tools or equipment you can't reasonably leave at work all generally qualify. The regular commute from home to your normal workplace doesn't - that's treated as private travel no matter how inconvenient it is.

If you use the cents per kilometre method

The rate the ATO sets (currently 88 cents per kilometre) is designed to cover the whole cost of running the car in one number - fuel, oil, servicing, insurance, registration and depreciation all rolled in. You can't then also claim these individually on top of it. Parking and tolls are the exception - they're claimed separately, on top of either method, because they're not part of the per-kilometre running cost.

If you use the logbook method

This is where itemised expenses come into play. You can claim the work-related percentage (from your 12-week logbook) of: fuel and oil, servicing and repairs, insurance, registration, interest on a car loan, and depreciation of the vehicle's value. Each of these needs to be substantiated with receipts, invoices or statements - fuel is the one exception where an estimate based on odometer records is generally accepted if you haven't kept every receipt.

What's never claimable, regardless of method

The ordinary commute between home and work, fines (speeding, parking), and - if you have a personal car loan - the loan principal repayments themselves (as distinct from the interest, which can form part of a logbook-method claim).

A quick example of the difference it makes

Two people drive similar work kilometres in a similar car. One claims cents per kilometre and stops at the 5,000 km cap - a claim capped near $4,000 regardless of their actual costs. The other has a compliant logbook and itemised expenses, and their actual running costs (especially with a newer or financed car) put their logbook-method claim well above that cap. The only difference is which records they kept.

Where Odomly comes in

Odomly captures the trip-level detail both methods need - purpose, odometer readings, business vs. private - as you drive, and lets you attach receipts to individual expenses as they happen. At report time, Odomly assembles this into an ATO-compliant report for whichever method suits your situation, so the claim reflects what you actually spent and drove, not an estimate.

This article is general information, not tax advice. Deductibility depends on your individual circumstances - check ato.gov.au or speak with a registered tax agent.