Motor vehicle deduction — cents-per-km vs logbook
Compare the two methods sanctioned by ITAA 1997 Division 28. Cents-per-km is capped at 5,000 business kilometres; logbook requires a 12-week record but lets you claim actual costs × business-use %.
Vehicle inputs
25% prime cost is typical for cars under Div 40.
Method comparison
Cents-per-km
$4,400.005,000 km × 88 c
Logbook
$12,985.0018,550 total × 70% business use
- Capped car cost
- $45,000.00
- Annual depreciation
- $11,250.00
- Total annual running
- $18,550.00
The logbook method gives the larger deduction by $8,585.00.
- Business kilometres exceed the 5,000 km annual cap for cents-per-km — only the first 5,000 km count under that method.
- Logbook must be a continuous 12-week record; once established it is valid for 5 years (unless circumstances change).
Frequently asked questions
Which method should I use?+
Cents-per-km is the easiest — no logbook required, but capped at 5,000 business kilometres. The logbook method usually wins when business use is high, the car is expensive to run, or you drive more than 5,000 business km a year.
How do I keep a valid logbook?+
A continuous 12-week period that is representative of normal use. Record date, odometer at start and end of each trip, kilometres, and the purpose. Once established it is valid for 5 years unless your circumstances change materially.
Is there a cap on the car cost?+
Yes — the Division 40 car cost limit caps the depreciation base. Anything paid above the limit gives you no extra deduction. GST credits are also capped at the limit divided by 11.
Not tax advice. Based on ITAA 1997 Division 28 (car expenses) and Division 40 (depreciation). Does not model FBT on private use of an employer-provided car, novated leases, or the operating-cost method for FBT. For personal advice consult a registered tax agent.