Car Expenses Tax Deduction Australia 2026: Cents per Kilometre vs Logbook Method

Nepali Worker Tax Guide

Why Car Deductions Are Common for Nepali Workers

Nepali students and workers in Australia often work in aged care, disability support, cleaning, hospitality, delivery, rideshare, warehouse jobs, community support and ABN work. Many of these roles involve travel, but not every trip is deductible.

People often search for can I claim petrol on tax Australia, fuel tax deduction Australia, car deduction for support workers, car deduction for cleaners Australia, and car expenses for ABN workers. The answer depends on what the travel was for and what records you have.

1. What Counts as Work-Related Car Travel?

Work-related car travel is usually travel that happens because of your work duties, not simply because you need to get to work. The facts matter.

• Driving from one work location to another work location during the same day
• Driving to visit clients, patients, customers or job sites as part of your duties
• Driving between separate workplaces where the travel is work-related
• Driving for eligible ABN or business activity
• Driving for delivery or rideshare work where business records are kept
• Carrying bulky tools or equipment in limited situations where ATO rules are met

The most important point is that the travel should be connected to earning income and supported by records.

2. What Travel Is Usually Not Deductible?

A common mistake is claiming normal home-to-work travel. In most cases, the cost of driving from home to your regular workplace and back home is private, even if you live far away, work late, or public transport is difficult.

• Normal travel from home to your regular workplace
• Normal travel from your workplace back home
• Parking near your regular workplace for ordinary commuting
• Tolls for ordinary home-to-work travel
• Fuel for private trips
• Car expenses for personal use
• Fines, speeding tickets or parking fines

This is why it is risky to simply claim fuel or kilometres without checking whether the travel is actually deductible.

3. Cents per Kilometre Method Explained

The cents per kilometre method lets eligible taxpayers claim a set rate for each work-related kilometre, up to the allowed kilometre limit for each car. For the 2025–26 income year, the rate is 88 cents per kilometre.

• You do not separately claim fuel, servicing, registration or insurance under this method.
• The rate is designed to cover eligible running costs.
• You still need a reasonable basis for calculating work kilometres.
• You should keep diary notes, rosters, job records, work location records or other supporting evidence.
• This method may suit people with lower work-related car use.

Example: If you had 1,200 eligible work-related kilometres for the 2025–26 income year, the claim using 88 cents per kilometre would be 1,200 × $0.88 = $1,056. The final deduction still depends on your records and circumstances.

4. Logbook Method Explained

The logbook method is based on your work-use percentage. You keep a valid logbook for a continuous representative period and apply the work-use percentage to eligible car expenses.

5. Which Method Is Better?

There is no single best method for everyone. The better method depends on the number of eligible work kilometres, your actual expenses, your record keeping and whether the travel is genuinely deductible.

• The cents per kilometre method can be simpler when work kilometres are lower.
• The logbook method may produce a better result where eligible work use is high.
• The logbook method needs stronger records of actual expenses.
• You should not choose a method only because it gives a bigger claim if the records do not support it.
• A tax agent can help compare both methods where enough records exist.

6. Car Expenses for Support Workers, Cleaners and Aged Care Workers

Support workers, aged care workers, disability care workers and cleaners may drive between clients, houses, facilities or job sites. Some of this travel may be work-related, while normal home-to-work travel is usually private.

• Driving from one client location to another client location may be work-related.
• Driving between different job sites during a shift may be work-related.
• Driving from home to the first regular work location is usually private.
• Driving from the final work location back home is usually private.
• Keep rosters, client visit records and kilometre notes.
• Do not claim estimated kilometres without a clear basis.

For related content, read our guide on tax deductions for nurses, aged care and disability support workers .

7. Car Expenses for ABN, Uber and Delivery Workers

ABN workers, Uber drivers, delivery drivers and rideshare workers often have car expenses connected to business activity. These claims need careful separation between business use and private use.

• Keep platform statements, trip records and income summaries.
• Track business kilometres separately from private kilometres.
• Keep fuel, service, insurance and registration records where using the logbook method.
• Check GST and BAS obligations if rideshare or business activity applies.
• Do not claim private driving as business driving.
• Keep records throughout the year instead of trying to reconstruct everything at tax time.

Read our Uber, delivery and rideshare tax return guide for more details.

8. Records You Should Keep for Car Expenses

Good records are the difference between a strong claim and a risky claim. Keep records close to the time of travel rather than guessing later.

• Work-related kilometres and dates
• Reason for each work-related trip
• Start and end locations where relevant
• Rosters, timesheets or client visit records
• Platform trip records for rideshare or delivery work
• Fuel receipts and servicing invoices if using logbook method
• Insurance and registration records if using logbook method
• Odometer readings
• Valid logbook where required
• Evidence showing how the kilometres were calculated

For broader deduction record guidance, read our deductions without receipts Australia guide .

9. Common Mistakes With Car Deductions

Car expense claims are common, but they are also easy to get wrong. These are the mistakes many taxpayers should avoid.

• Claiming home-to-work travel as work travel
• Claiming petrol without calculating work kilometres
• Claiming both cents per kilometre and actual expenses for the same car use
• Using the wrong kilometre rate for the wrong income year
• Claiming private trips as business trips
• Not keeping a logbook when using the logbook method
• Guessing work-use percentage
• Claiming car expenses reimbursed by an employer or client
• Not separating rideshare, delivery, ABN and private use
• Copying a friend’s claim without checking your own records

10. Nepali Workers Car Deduction Australia

Nepali students and workers should be extra careful with car expense claims because work arrangements can be mixed. One person may have a TFN job, ABN work, cash jobs, rideshare income and private study travel in the same year.

The safest approach is to organise income and travel records before lodging. Do not assume that every kilometre is deductible just because the car helped you get to work.

• Separate TFN employee travel from ABN business travel.
• Separate private driving from work-related driving.
• Check whether each job location is a regular workplace.
• Keep clear records for client-to-client travel.
• Ask a registered tax agent before claiming large car expenses.

11. How Hamro Accountant Can Help

Hamro Accountant can help Nepali students, workers, ABN holders, delivery drivers, support workers and small business owners review car expense claims before lodging a tax return.

• Review whether travel is work-related or private
• Compare cents per kilometre and logbook method where records allow
• Help organise car expense records
• Review Uber, delivery and ABN car use
• Check work-related deductions before lodgement
• Support Nepali workers across Australia online

Official Source Links

Car expense rules can change by income year. Always confirm the correct rate and method before lodging.

• ATO: Motor vehicle and car expenses
• ATO: Employee guide for car expenses
• ATO: Cents per kilometre deduction rate

Quick Car Deduction Checklist

Before lodging your tax return, check:

• You separated private travel from work-related travel.
• You did not claim normal home-to-work travel unless a specific exception applies.
• You used the correct rate for the correct income year.
• You kept records showing how kilometres were calculated.
• You did not claim reimbursed expenses.
• You did not double claim actual expenses and cents per kilometre for the same use.
• You kept logbook and expense records if using the logbook method.
• You asked a registered tax agent if your situation is unclear.