Claiming Motor Vehicle Expenses: The 2025 All-In-One Guide

Who Can Claim?

You can claim if you use your own car for work (employee, sole trader, or business owner). If your boss provides the car, you generally can’t claim unless you pay for running costs and aren’t reimbursed.

What Trips Count?

You can claim:

• Trips between separate workplaces (e.g. office to client site)

• Trips from your workplace to an alternative workplace (like a meeting or training)

• Trips between jobs on the same day

• Carrying bulky tools or equipment your boss requires (and there’s nowhere safe to store them at work)

You can’t claim:

• Home to regular work (that’s just commuting)

• Minor detours (like grabbing a coffee)

• Private trips (shopping, school runs, etc.)

What Costs Can You Claim?

• Fuel

• Registration

• Insurance

• Repairs and servicing

• Loan interest (if you’re paying off the car)

• Depreciation (decline in value)

• Lease payments

• Parking and tolls (for work trips only)

• Car washing (if it’s work-related)

If you use the cents per kilometre method, all these costs are included in the rate—don’t claim them separately.

Claim Methods for 2025

A. Cents Per Kilometre Method

• Up to 5,000 work kms per car, per year

• 2025 rate: 88 cents per km

• No logbook, but you need to show how you worked out your kms (diary, calendar, etc.)

• Covers all running costs

B. Logbook Method

• Claim a percentage of your actual car expenses, based on work use

• Keep a 12-week logbook (good for 5 years unless your work use changes)

• Record all car expenses (fuel, rego, insurance, repairs, etc.)

• Work out your work-use percentage from your logbook

• Claim that percentage of your total car costs

C. Actual Expenses (for non-cars, like big utes, vans, or motorcycles)

• Keep receipts for everything

• Claim the work-related portion

What Records Do You Need?

Cents Per Kilometre:

• Reasonable estimate of work kms (diary, calendar, work records)

Logbook:

• 12-week logbook (start/end odometer, dates, work vs private trips, reasons for trips)

• Receipts for all car expenses

• Odometer readings at the start and end of each financial year

Tip: Get your logbook from Deduction Grabber—easy, cheap, and ATO-compliant.

Common Misconceptions

• “I can claim driving to and from work.” Nope, that’s commuting—no deduction.

• “I can claim all my car expenses if I use it for work sometimes.” Only the work-related portion counts.

• “I don’t need records if I use the cents per km method.” You still need to show how you worked out your kms.

• “I can claim parking fines.” Not a chance.

• “I can claim if my boss reimburses me.” If you get paid back, you can’t claim.

10 Quick Q&As

Can I claim driving from home to work?
No, unless you’re carrying bulky tools and meet strict rules.

What if I use my car for both work and private?
Only claim the work-related portion.

Do I need a new logbook every year?
No, it’s valid for 5 years unless your work use changes.

Can I claim for more than one car?
Yes, but the 5,000km limit is per car, not per person.

What if I use a work car?
Generally, you can’t claim unless you pay for running costs and aren’t reimbursed.

Can I claim tolls and parking?
Yes, but only for work-related trips.

What if I forget to keep receipts?
You can use the cents per km method, but you still need to justify your kms.

Can I claim car washing?
Yes, if it’s work-related (like if your car needs to be presentable for work).

Can I claim loan repayments?
No, but you can claim the interest portion and depreciation.

Where do I get a logbook?
Grab one from Deduction Grabber—ATO-compliant and easy to use.

Quick Recap

• Pick a method: cents per km (up to 5,000km, 88c/km) or logbook (actual % of costs)

• Only claim work-related trips

• Keep good records—logbooks, receipts, diaries

• Don’t double-dip on costs

• If in doubt, stick to what you can prove

That’s the lot. Keep it honest, keep your records, and you’ll be set for tax time. If you need a logbook, Deduction Grabber’s your go-to.