How much can I claim for using my car for work? The rate just went up to 91 cents

You use your own car for work — driving between clients, to a second job, out to a site, picking up stock. At tax time you know you can claim something for it, and the easy way is a flat rate for every work kilometre you drove. The question is always the same: how much, and how do I prove it? This year the number changed, and there is one trap in which figure applies to which return.

Two figures — and the year each one belongs to

The ATO sets the cents-per-kilometre rate each year. For the 2025–26 income year — the return most people are lodging right now — the rate is 88 cents per kilometre. For the 2026–27 year, the one you are actually driving in today, a new determination (LI 2026/19) lifted it to 91 cents, effective 1 July 2026. The ATO has noted the 91 cents is a base of 89 cents plus a one-off 2-cent uplift for this year only, added to reflect higher running costs.

So the rate on the return in front of you now is 88 cents; the 91-cent rate shows up when you lodge next year. Mixing the two up is the most common slip with this claim.

Either way, the method is capped at 5,000 work kilometres per car, per year. At 91 cents that caps the deduction at $4,550 for 2026–27; at 88 cents it is $4,400 for 2025–26. You do not need receipts for fuel or servicing, but you do need to be able to show how you worked out your work kilometres — a diary, a roster, a logbook app — and that the car is yours.

What the rate already covers

The single biggest misunderstanding is treating the cents-per-kilometre amount as something you add on top of your petrol, registration and insurance. You don't. The ATO is explicit that the rate is designed to cover all your car's running costs — fuel, servicing, registration, insurance and the decline in value (depreciation) of the car — in one figure. You cannot claim the rate and then claim those costs again separately; that is double-dipping, and it is exactly the kind of thing data-matching flags.

It also only applies to a 'car' as the ATO defines it: a vehicle designed to carry a load under one tonne and fewer than nine passengers. A one-tonne ute or a van above that threshold isn't a 'car' for this method and is claimed differently.

The trip most people wrongly assume they can claim

Here is the one that catches people out: your ordinary commute between home and your regular workplace is private travel, and it is generally not deductible — no matter how far you live from work or how bad the traffic is. The kilometres that do count are work trips during the day: travelling between two different jobs, driving from your workplace to a client or a site and back, or trips where you genuinely carry bulky tools you can't leave at work. Counting the daily drive to the office is one of the fastest ways to have a car claim adjusted.

Cents per kilometre, or a logbook?

The flat rate is the simple option, and for anyone under about 5,000 work kilometres with an ordinary car it is usually the sensible one. But it isn't the only method, and it isn't always the bigger deduction. The logbook method has no 5,000-kilometre ceiling: you keep a logbook for at least 12 continuous weeks that fairly represents your year's driving, work out your work-use percentage, and claim that share of your actual running costs — fuel, insurance, registration, servicing, depreciation and loan interest.

For someone who drives a lot for work, or runs an expensive car with high running costs, the logbook method often produces a materially larger — and fully legitimate — deduction than the 5,000-kilometre cap allows. The catch is the record-keeping: no logbook, no logbook method. The rule of thumb is simple — low work mileage, use the flat rate; high mileage or a costly car, keep a logbook and do the arithmetic once.

None of this is a reason to claim less than you're entitled to. It is a reason to claim the right kilometres, under the right method, with a record behind them. If you drive for work, the cheapest habit you can build is writing the trips down as they happen — the reconstruction the night before you lodge is exactly what doesn't hold up.

This is general information current as at July 2026, not advice for your situation — which method suits you depends on how much and how you drive. If you use your car across a job and a side business, run close to the 5,000-kilometre cap, or aren't sure a trip counts as work, that is worth working through with a registered agent before you lodge. That is what our individual tax return and sole-trader services are for.