Work-related car expenses

Who can claim

This deduction is available to individuals.

You incurred and paid the expense yourself.
The expense has a direct connection with earning your current employment income.
The car travel is undertaken while performing employment duties or between workplaces.
Travel from home to an alternative workplace and then to the regular workplace or home can qualify when it is required by current duties.
Home-to-work travel can qualify where the employment is genuinely itinerant or requires shifting workplaces.
Home-to-work travel can qualify where you must carry bulky equipment essential to your duties, there is no secure storage at work and using your car is the only practical transport.
For the cents per kilometre method, you can substantiate a reasonable estimate of work kilometres.

Do not include a private or domestic portion.
Do not claim an item or cost your employer or another party provided, paid or reimbursed; if partly reimbursed, claim only the unreimbursed eligible portion.
A taxable allowance is generally declared as income. It does not automatically create or prevent a deduction; claim only the actual eligible amount you incurred.
Ordinary home-to-regular-workplace travel is private unless one of the alternative-workplace, itinerant-work or bulky-equipment exceptions is satisfied.
Choosing to carry ordinary tools or equipment, or driving for convenience, does not make the commute deductible.
The cents per kilometre method is limited to 5,000 work kilometres per car for the income year.

Cents per kilometre: eligible work kilometres, capped at 5,000, multiplied by the ATO rate for the income year. 2025-26: 88 cents. 2026-27: 91 cents.

You can work this amount out step by step in the Deductit calculators.

Primary source: ATO TR 2021/1 transport expenses (TR 2021/1). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.

Supporting sources: