ATO logbook method vs cents per km: which should you use?
Use cents per km if you drive 5,000 business kilometres or less a year: it needs no receipts, just a record of how you worked out your kilometres. Above 5,000 km, or with a costly car, the logbook method usually gives a bigger claim, but it needs a 12-week logbook and your car expense records.
Cents per km
- One rate per business kilometre, covering all running costs including depreciation.
- Capped at 5,000 business km per car each income year.
- No logbook, but you must be able to show how you worked out your business kilometres, for example from diary records.
Logbook method
- Keep a logbook for 12 continuous weeks that represent your normal driving. It stays valid for 5 years unless your driving changes.
- The logbook gives your business-use percentage. You claim that share of your actual car expenses: fuel, insurance, registration, servicing, interest on a car loan and decline in value.
- For each trip in the 12 weeks, record the start and end date, odometer readings at the start and end, the kilometres and the reason. Also record the odometer at the start and end of the logbook period.
- You need receipts for the expenses; fuel can be estimated from the odometer readings.
Which gives more
Roughly: work out your business-use percentage times your yearly car costs and compare it with your business kilometres (up to 5,000) times the cents per km rate. Heavy drivers and owners of newer or more expensive cars usually come out ahead with the logbook.
Keeping the 12 weeks easy
Milo records every drive with odometer readings and asks you to mark it business or private, so the 12-week logbook builds itself.