Cents per KM Calculator Australia

The cents per km method is the simplest way for most Australian taxpayers to claim a work-related car deduction. No logbook, no fuel receipts — just enter your business kilometres and the calculator below works out your deduction instantly. For FY2025-26 the ATO has set the rate at 88 cents per kilometre, capped at 5,000 kilometres per car per year.

Disclaimer: This tool provides general information only and does not constitute tax advice. Consult a registered tax agent for advice specific to your circumstances.

Cents Per KM Calculator

Estimate my km from trip details

Fill in all three fields and your total will be calculated automatically.

How the cents per km method works

The cents per km method lets you claim a flat rate for every kilometre you travel for work, without needing to track your actual car running costs. For the 2025-26 financial year (1 July 2025 to 30 June 2026), the ATO has set the rate at 88 cents per kilometre under Tax Determination TD 2025/4.

The rate is an all-in figure — it is designed to cover the cost of:

  • Fuel and oil
  • Vehicle registration and insurance
  • Tyres and routine servicing
  • Depreciation on the value of the car

Because all of those costs are bundled into the 88c rate, you cannot separately claim them if you use this method. The method is limited to 5,000 business kilometres per car per year. If you drive more than that for work, you can still claim up to 5,000 km using this method — you simply cannot go higher under the cents per km approach.

Two items that are not bundled into the rate and can be claimed on top with valid receipts are:

  • Parking fees — where you park for a work-related purpose
  • Tolls — road tolls incurred while travelling for work

Keep those toll and parking receipts separately. They are deductible on top of whatever the cents per km calculator above returns.

When cents per km is the right method

The cents per km method suits most taxpayers who drive a moderate amount for work. You should consider it when:

Your business kilometres are under 5,000 per year. If you drive fewer than 5,000 business kilometres in a financial year, cents per km covers your full entitlement and you do not need to keep any running-cost records at all.

You do not have a logbook. Unlike the logbook method, cents per km does not require you to keep a 12-week logbook of every trip. You simply need to be able to show the ATO how you worked out your kilometres — a diary of work trips, a route record, or appointment logs are all acceptable. You do not need to retain fuel receipts, insurance papers, or servicing records for this method.

Your car is primarily personal. If business travel makes up a small proportion of your total driving, the logbook method would give you a business-use percentage applied to all running costs — and the running cost percentage claim might actually be lower than 5,000 km × 88c. The cents per km method cuts through that complexity.

You want a simple, defensible claim. The ATO accepts the cents per km method as straightforward to administer. Provided you have records showing how you arrived at your kilometre figure, the claim is clean.

When the logbook method beats cents per km

The logbook method can produce a significantly larger deduction in certain situations, and it is worth running the numbers if any of the following apply to you.

You drive more than 5,000 business kilometres per year. Once you exceed the 5,000 km cap, the cents per km method stops scaling. The logbook method has no hard kilometre ceiling — it is based on a percentage of your total running costs, which rises as you drive more.

Your business-use percentage is high. If you use your car predominantly for work — for example, a sales rep who drives to client sites every day or a tradie who travels between job sites — your running costs multiplied by a high business-use percentage will likely exceed 5,000 × 0.88 = $4,400. A logbook gives you that percentage.

You drive an expensive car. Higher running costs — including depreciation on a newer or premium vehicle — mean the actual-cost calculation under the logbook method produces a larger number. The 88c rate is calibrated for an average car; it does not scale up for expensive ones.

You are willing to keep a 12-week logbook. The logbook method requires you to record every trip — start and end odometer readings, kilometres travelled, destination, and the work purpose — for a continuous 12-week representative period. Once you have a valid logbook, it remains valid for five years unless your work-use pattern changes significantly. The upfront record-keeping effort pays off if your deduction is substantially larger.

For a detailed comparison of both methods, see the ATO’s guidance on work-related car expenses.

Frequently asked questions

What’s the cents per km rate for 2025-26 in Australia?

The rate is 88 cents per kilometre for the 2025-26 financial year (1 July 2025 to 30 June 2026). This rate was set in ATO Tax Determination TD 2025/4. Previous years used different rates — 85c/km for 2023-24 and 2024-25 — so make sure you are using the correct rate for the year you are claiming.

Is the 5,000 km cap per person or per car?

Per car. The 5,000 kilometre cap applies to each car separately. If you use two different vehicles for work during the year, you can claim up to 5,000 business kilometres on each vehicle at 88c/km — giving a potential maximum of $8,800 across two cars. Each car’s claim is assessed independently.

Do I need a logbook for the cents per km method?

No logbook is required. However, you must be able to demonstrate to the ATO how you worked out your business kilometres if asked. A diary of work trips, calendar entries, appointment records, or a route log is sufficient. The ATO will not accept a round-number estimate with no supporting evidence, so keep some form of contemporaneous record during the year.

When should I use the logbook method instead?

Consider the logbook method whenever your real running costs multiplied by your business-use percentage exceeds your kilometres multiplied by 0.88. In practice, this often means tradies, sales representatives, and anyone who drives more than 5,000 business kilometres per year or uses a higher-value vehicle heavily for work. If your annual deduction under cents per km is capped at $4,400 but your actual car costs (fuel, insurance, rego, depreciation) are high and your business-use percentage is above 30–40%, the logbook method will likely return more.

Can I claim parking, tolls, rego or insurance on top of cents per km?

Parking fees and tolls can be claimed on top of the cents per km deduction, provided you have receipts and the expense relates to a work trip. Registration, insurance, fuel, maintenance costs, and depreciation cannot be separately claimed — they are all included in the 88c rate. Attempting to claim those costs on top of cents per km would constitute double-dipping.

Does cents per km work for motorbikes or bicycles?

No. The cents per km method applies only to cars — defined by the ATO as a motor vehicle designed to carry fewer than one tonne and fewer than nine passengers. Motorbikes and motorcycles are not cars under this definition, so they cannot use the cents per km method; their work-related travel is deductible under the actual cost method. Bicycles fall under a separate work-related transport rule rather than the car expense provisions.

Track vehicle expenses automatically with Taxr

Keeping the records to support a cents per km claim — or building the data you need to compare it against the logbook method — is much easier when your expenses are captured as you go. Taxr lets you snap a photo of every toll receipt, parking ticket, and car-related expense the moment you receive it. The app extracts the amount, date, and category automatically and stores everything securely in one place.

At tax time, export a clean summary to hand to your accountant or to check your claim is complete. No shoeboxes, no scrambling in June, no missed deductions.

Download Taxr

Last reviewed: 4 May 2026 (FY2025-26). Tax law changes — verify the current rate against the ATO before lodging.