You can claim a deduction for work-related expenses for a vehicle that either:
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Does not belong to you (i.e., is someone else's vehicle)
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Is not classified as a standard car (such as a truck or motorcycle, regardless of ownership)
These expenses are claimed as work-related travel expenses, not as work-related car expenses.
Steps to Claim a Deduction
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Work-Related Trips Only: The expenses must be incurred for work-related trips. You can claim for travel between workplaces or trips to perform work duties. Note that you cannot claim for trips between your home and workplace, except in limited situations.
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Personal Expenditure: You must have paid for the expenses yourself and not been reimbursed.
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Record-Keeping: Maintain records of your expenses. If the travel is partly for private purposes, only the work-related portion of the expenses can be claimed.
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Different Calculation for Owned Vehicles: If the vehicle is a car that you own, a different calculation method applies. Refer to guidance on expenses for cars you own or lease.
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Employer Allowance: If you receive an allowance from your employer for vehicle expenses, it must be reported as assessable income on your tax return. This amount will be shown on your income statement or payment summary.
Using Someone Else's Vehicle
This refers to a vehicle owned by your employer or another party, not you. Running costs for a car under a salary sacrifice or novated lease arrangement cannot be claimed, as your employer typically pays these costs and claims the deductions. However, you may claim additional expenses like parking and tolls related to work use.
If you use a car owned by a family member and there is a private agreement making you the effective owner or lessee, you calculate expenses as though it is your vehicle.
Vehicles That Are Not Cars
Vehicles not classified as cars include motorcycles, scooters, trucks, heavy vehicles, and some utes with a carrying capacity of one tonne or more, or minibuses with a capacity of nine or more passengers, including the driver.
Calculating Deductions for Non-Car Vehicles
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Determine your actual expenses for work-related travel using the vehicle.
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Claim the deduction as a work-related travel expense on your tax return. You cannot use the cents per kilometre or logbook methods but keeping a record similar to a logbook is recommended for calculating your work-related usage percentage.
Record Keeping for Vehicle Expenses
You must maintain:
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Evidence of how you calculated the work-related use of the vehicle.
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Original receipts for all vehicle expenses.
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Details of how you calculated the decline in value of the vehicle, including the method and effective life used.
For electric or plug-in hybrid electric vehicles (PHEVs), if relying on Practical Compliance Guideline PCG 2024/2 for home charging rates, keep an electricity bill showing your incurred costs. Note that PCG 2024/2 applies to PHEVs from 1 July 2024 onwards.
The myDeductions tool in the ATO app can be used for managing your vehicle expense records.
Example: Actual Work-Related Expenses for a Motorcycle
Samid purchases a motorcycle for work, making local deliveries, and also uses it privately. To determine his work-related use, he keeps a record similar to a logbook, noting both work-related and private trips.
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Total Kilometers for the Year: 3,000 km
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Logbook Period: 12 weeks
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Total Kilometers in Logbook Period: 800 km
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Work-Related Kilometers in Logbook Period: 600 km
Samid calculates his work use percentage as 75% (600 ÷ 800).
He keeps receipts for all expenses. His total motorcycle expenses for the year are:
|
Expense Type |
Amount |
|
Fuel and Oil |
$560 |
|
Repair |
$400 |
|
Registration |
$540 |
|
Compulsory Third Party Insurance |
$300 |
|
Decline in Value |
$1,800 |
|
Total |
$3,600 |
To determine his tax deduction, Samid multiplies the total expenses by his work use percentage: $3,600 × 75% = $2,700.
