Car Tax Deduction Calculator

Choose the Supported Car Deduction

This car tax deduction calculator compares cents per kilometre with the logbook method for an employee or sole trader who owns or leases an eligible car. Select the income year and confirm the claim facts before using either result.

An eligible car carries less than one tonne and fewer than nine passengers. Motorcycles and larger vehicles use different expense rules. This calculator leaves deductions unavailable for other entities, other vehicles, cars the client does not own or lease and unreviewed trips or costs.

Review which journeys qualify as work travel. Ordinary travel between home and a regular workplace is generally private. Remove reimbursed amounts and any GST the client can recover before entering expenses. Include only costs the client can claim.

The deduction reduces taxable income. Vehicle duty, registration charges and an employer’s fringe benefits valuation answer different questions. A car tax write-off also depends on the expense type: running costs and an asset’s decline in value follow different rules.

Calculate From Business Kilometres

Cents per kilometre multiplies qualifying annual travel by 88 cents, capped at 5,000 business kilometres for each car. The supported income years are 2024-25 and 2025-26. The ATO’s rate determination guidance confirms the rate for both years.

For 6,400 qualifying kilometres, the calculator includes 5,000 and shows 1,400 above the limit. The deduction is $4,400. Travelling further does not prevent this method, but those extra kilometres do not increase its deduction.

The rate already covers car running costs and decline in value. Claiming fuel, insurance or depreciation again would count the same costs twice. The calculator keeps the kilometre deduction separate from entered expenses.

Calculate From the Client’s Car Expenses

The logbook deduction applies the established business-use percentage to annual running costs plus a separately established decline-in-value amount. The ATO’s logbook guidance explains the representative 12-week period and the expense records behind this method.

Enter running costs before private use, including eligible fuel, repairs, registration and insurance. Include eligible lease costs for a leased car and enter zero decline in value. For an owned car, exclude loan principal and enter only eligible interest and other running costs.

Enter decline in value once, using an amount established separately under the applicable depreciation rules. Do not enter the purchase price. This tool applies private use after entry, so an amount already reduced for business use would be reduced twice.

The client’s car purchase is not automatically an immediate deduction. An eligible business considering an immediate asset write-off needs the instant asset write-off calculator. Keep that asset claim separate from the running-cost calculation here.

Use the logbook calculator to reconcile kilometres and establish the percentage from the client’s records. Selecting that records support the claim here is an entered fact, not an assessment of the logbook’s validity.

Compare the Methods

When both methods are supported, the headline shows the larger deduction. Choose one method for this car for the income year. If logbook records do not support a claim, only the kilometre method is shown.

In the fictional mixed-use example, an employee owns an eligible car, travels 6,400 business kilometres and has a supported 65% business-use percentage. Annual running costs are $9,000 and separately established decline in value is $3,000.

The logbook method gives $5,850 of business running costs plus $1,950 of decline in value, totalling $7,800. Private expenses are $4,200. The kilometre deduction is $4,400, so the logbook result is $3,400 larger.

For the same adult full-year resident with $90,000 taxable income before this deduction in 2025-26, estimated income tax falls by $2,340 with logbook. It falls by $1,320 with kilometres. The tax saving is separate from the expense deduction.

The optional estimate compares the selected year’s ordinary individual income tax before and after each supported deduction. Resident results include the low income tax offset. Foreign-resident results use full-year foreign rates. Other tax treatment leaves the estimate unavailable.

The estimate excludes Medicare, other offsets and study-loan repayments. Income after this deduction is floored at zero, so losses carried forward are outside the estimate. Use the income tax calculator for the annual return estimate after other adjustments and withholding.

Records Behind the Claim

Keep the trip records and calculation that explain qualifying kilometres under the kilometre method. A receipt for each running cost is not required for that method, but the business travel must have a reasonable basis.

For logbook, retain the representative period’s journey details, starting and closing odometer readings and annual odometer records. Keep expense evidence and the separate depreciation calculation. The ATO’s motor vehicle records guide lists the information each record needs.

A logbook can support up to five years while use remains representative. Review changed travel patterns before relying on an older percentage. The calculator cannot establish ownership, trip purpose, reimbursement treatment or whether the records meet the claim rules.

Enter amounts without client names or vehicle registration details. Calculations run on your device. Entries are neither uploaded nor saved in browser storage.