Motor Vehicle Deductions: Logbook vs Cents Per Km
The Australian Taxation Office offers two primary methods for claiming work-related car expenses: the cents-per-kilometre method (up to 5,000 km) and the 12-week logbook method. Northern Accountants calculates both methods to secure your highest legal refund.
The Cents-per-Kilometre Method Explained
The cents-per-kilometre method allows taxpayers to claim up to 5,000 business kilometres per vehicle per year at the statutory rate (85c per km). While receipts for fuel are not mandatory, you must substantiate how you calculated your work kilometres via a diary or work log.
The 12-Week Logbook Method Explained
The logbook method requires keeping a continuous, compliant 12-week travel diary recording date, start/finish odometer readings, kilometres travelled, and business purpose. Once established, this business percentage is valid for five financial years and applies to all running costs including fuel, servicing, insurance, registration, and depreciation.
Which Method Delivers a Higher Tax Refund in the NT?
Territory drivers travelling extensive regional distances or operating high-value utilities and 4WDs almost always achieve significantly larger tax deductions using a compliant 12-week logbook compared to the 5,000 km statutory cap.
Need Professional Advice for Your Situation?
Northern Accountants provides fixed-price consultations and tax lodgements from our Casuarina Village and Palmerston City offices. Phone our team today or book an appointment online.
Frequently Asked Questions
Can I claim home-to-work travel under either method?
No. Standard commuting from home to your primary workplace is considered private travel by the ATO, unless you carry bulky tools or travel between distinct client job sites.
How often do I need to keep a new logbook?
A compliant logbook remains valid for up to 5 financial years, provided your travel pattern does not change materially.
Can husband and wife claim separate vehicle deductions on the same car?
Yes, provided both individuals have legitimate work-related usage, separate records are maintained, and the combined claim does not exceed total actual vehicle expenses.
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