Cents per kilometre or logbook? How to claim work-related car expenses

Individuals claiming work-related expenses for a car they own or lease choose between two ATO methods: the cents per kilometre method — a set rate covering all car costs (88 cents for the 2025-26 return being lodged from July 2026; 91 cents for travel from 1 July 2026), capped at 5,000 work-related kilometres per car with no receipts required — or the logbook method, which claims your work-use percentage of actual costs including decline in value, based on a 12-week logbook plus written evidence. Neither method is always the winner: the outcome depends on your kilometres, actual running costs and records, so it is worth calculating both where your records allow.

Key points:
- There are only two methods for individuals claiming work-related expenses for a car they own or lease: **cents per kilometre** and **logbook**. Other vehicles (one-tonne-plus utes and trucks, 9+ passenger vehicles, motorcycles) and cars you don’t own or lease use actual costs claimed as travel expenses instead.
- The cents per kilometre rate is **91 cents** for 2026-27 travel, enacted by [legislative instrument F2026L00785](https://www.legislation.gov.au/F2026L00785/asmade) which commenced 1 July 2026 — but the 2025-26 return you lodge from July 2026 uses **88 cents**.
- Cents per kilometre is capped at **5,000 work-related kilometres per car per year**, and the rate covers everything — fuel, registration, insurance, maintenance, repairs and decline in value. No receipts are needed, but you must be able to show you own the car and how you worked out your kilometres.
- The logbook method has **no kilometre cap**: you claim your work-use percentage of actual costs including fuel, registration, insurance, servicing, loan interest, lease payments and decline in value — but it demands a 12-week continuous logbook (valid up to 5 years), odometer records and receipts.
- Decline in value is claimable **only under the logbook method**, and the cost you can depreciate is capped by the car limit — $69,674 for cars first used in 2025-26 and $69,883 for 2026-27. A car’s effective life is generally 8 years.
- Cars under a salary sacrifice or novated lease arrangement are usually excluded — it is generally your employer, not you, that leases the car, so you can’t claim its running costs (though work-related parking and tolls remain claimable). You can use different methods for different cars and switch methods from year to year.
- **New from 2026-27:** the methods are unchanged, but a Division 28 car deduction now reduces the new [standard deduction](/technical-resources/glossary#standard-deduction) dollar for dollar (s 25-130(2)(d), inserted by the [Treasury Laws Amendment (Tax Reform No. 1) Act 2026](https://www.legislation.gov.au/C2026A00049/asmade)) rather than sitting on top of it. The same Act repeals s 28-180 and Subdivision 900-I (award transport payments) from 2026-27.