Motor Vehicle Expenses - What can I claim?

Nyssa Gower
Jun 23, 2023
2 min read

Updated: Apr 26

I use my motor vehicle everyday for work, so that makes it tax deductible - right?

It’s one of the most common questions we get. Unfortunately, for most people, the answer is a bit more complex than a simple "yes." Here is the breakdown of what the ATO actually allows.

Commuting

Bad news. Travel between your home and regular place of work is considered private. Regardless of whether you drive, ride, walk or e-scooter to work, it's not tax deductible.

Travelling

Good news. If travel occurs during your work day, you can claim it! Examples include:

Travelling from your office to visit a client or supplier.
Travelling to an alternative workplace, like a client's premises or other offices for the same business, that you don't regularly attend.

Travel between home and work on work will depend on whether it is a regular workplace or alternative workplace. If it is an alternative workplace such as a client premises or your employers office that you do not regularly attend, then it can be considered that you are travelling on work and this is deductible.

You can claim some of your motor vehicle costs using either the Log Book Method or the Cents per Kilometre Method as shown below.

The "Bulky Tools" Exception

Ah, now you're thinking! Yes! The exception to the commuting rule and...drum roll... tax deductible! You could be a music teacher that has to transport a drum kit, cello or other bulky equipment to and from your place of work or to halls for private lessons. You might be a builder or painter and have to transport all your bulky equipment in the back of your SUV, ute or with the assistance of a tool trailer. You can claim your motor vehicle costs in these instances. If tow capacity is less than 1 Tonne, or a Wagon model, we suggest keeping a log book (see below).

Choosing Your Method

There are two different methods - Logbook and Cents per Kilometre. Use whichever will give you the highest deduction.

Pro Tip: If you want to maximize your claim and save hours of admin, we love apps like CarSavvy. They automate the logbook process so you don't have to play "catch up" at tax time.

Fringe Benefits

If your business (Trust or Company - not Sole Trader) own the vehicle, it may trigger fringe benefits.

2025/26 - The ATO is currently auditing motor vehicles claims - which means your accountant is going to get extra pedantic about you providing log books, receipts & diaries.

The only vehicles that are exempt from this are: