Cents per km Calculator Australia

What Is the Cents per km Method?

The cents per km method is the easiest way to claim your work-related car expenses. The ATO gives you a flat rate per kilometre driven for work purposes. For the 2026-27 financial year, this rate is 91c/km (up from 88c in the previous year).

This flat rate is designed to cover ALL your vehicle running costs — fuel, registration, insurance, servicing, repairs, and depreciation. You can claim a maximum of 5,000 kilometres per car using this method, which gives a maximum deduction of $4,550.

The best part? You don't need to keep piles of receipts. You just need to be able to show the ATO a "reasonable estimate" of how you worked out your kilometres, such as diary records of regular trips.

Current ATO Rates — Cents per km (2024 to 2027)

The ATO regularly updates the cents per kilometre rate to reflect the rising cost of living, fuel prices, and general vehicle maintenance expenses. Here are the rates for recent financial years:

• FY 2026-27: 91 cents per km
• FY 2025-26: 88 cents per km
• FY 2024-25: 85 cents per km

Make sure you select the correct financial year in the calculator above to get an accurate estimate of your tax deduction.

How to Calculate Your Deduction (Worked Example)

Let's say you're a sparky doing callouts across Sydney. You reckon you drive about 4,200 km between job sites, picking up parts from Middy's, and heading to the supply house over the year.

Using the 2026-27 rate: 4,200 km × 91c = $3,822 deduction.

That's $3,822 straight off your taxable income. You can use our Tradie Tax Deduction Calculator to see how this vehicle claim fits into your total tax deductions for the year.

The Logbook Method Explained

The alternative is the logbook method. This is where you calculate the actual costs of running your vehicle and multiply it by your business-use percentage.

To use this method, you must keep a continuous logbook for at least 12 weeks to establish your business-use percentage. Your logbook stays valid for 5 years unless your driving circumstances change significantly. You also need to keep receipts for all your vehicle expenses.

It's more paperwork, but if your ute does heaps of kilometres or costs a fortune to run, the logbook method is usually worth the extra effort.

Cents per km vs Logbook — Which Is Better for You?

If you drive under 5,000 km and hate paperwork, the cents per km method is for you. If you drive 15,000+ business km and have high vehicle costs, the logbook method usually wins out.

Our calculator at the top of the page runs a breakeven analysis for you. Just punch in your estimated kilometres and your annual expenses, and the winner banner will tell you exactly which method saves you more money. If you're a sole trader, you can plug the winning deduction into our Sole Trader Tax Calculator to estimate your final tax bill.

What Counts as Work-Related Travel for Tradies?

The ATO is very specific about what counts as work-related travel:

• ✅ CAN claim: Driving between job sites, travelling to pick up materials/parts, carrying bulky tools (if securely stored at work is not an option), travelling to temporary work locations.
• ❌ CANNOT claim: Driving from home to your regular depot or office (normal commute), private errands during work hours, weekend personal use.

The big one tradies get wrong is claiming the drive from home to their regular depot. This is NOT claimable. If you're charging clients for travel, check out our Travel Fee Calculator to ensure you're pricing it correctly.

Record Keeping Tips

For the cents per km method, keep a diary, calendar, or Google Maps timeline to justify your estimate. For the logbook method, you need a 12-week continuous recording of the date, start km, end km, and purpose of every trip.

The ATO's myDeductions app is a great free tool to track this on your phone. The ATO is cracking down on dodgy vehicle claims, so keep your records clean.

Common Vehicle Deduction Mistakes

• Claiming home to work travel as a deduction.
• Trying to claim more than 5,000 km using the cents per km method.
• Not keeping a valid 12-week logbook for the logbook method.
• Claiming private use or personal errands in your logbook.
• Double-dipping (trying to use both methods for the same car in the same year).
• Forgetting to update your logbook when your circumstances change or after 5 years.