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30 June, 2022 - 2 min read

ATO cents per km reimbursement rate for 2021/2022

The ATO mileage rates are important for your mileage reimbursement calculations. This year, the ATO has kept the mileage rate the same as the previous year. 

For work-related mileage incurred from July 1, 2021, the ATO cents per kilometre rate for cars (not including motorcycles or vehicles with a carrying capacity of one tonne or more, or nine or more passengers, such as a utility truck or panel van) is: 

  • $0.72 per kilometre driven for business

Learn more about the historic ATO cents per km rates.

 The current ATO mileage rate 2021

Starting from the 2021 financial year, the mileage rate for cars (motorcycles or vehicles with a carrying capacity of one tonne or more, or nine or more passengers, such as a utility truck or panel van) using the cents per km method is $0.72 per km driven for business. 

You can use this rate with the cents per km method for your mileage claim as a sole trader, or if your employer reimburses you at the ATO mileage rate.

As an employee, your employer can choose to reimburse you for the costs you incur when you use your vehicle for business. It's up to your employer to set the rate and the rules for reimbursement, but the ATO mileage rate is the standard. If you're paid more per kilometre than the ATO mileage rate in 2021, or if you’re paid a car allowance rather than being directly reimbursed for your specific expenses, those payments are considered taxable income.

If you're self-employed, you have the option of using the ATO's rate to deduct the costs of using your car for business.

Alternatives to the cents per km reimbursement rate 2021

As a self-employed entrepreneur or a business owner, you have the option of calculating the costs of operating your vehicle for business using either a logbook or, if your business is a company or trust, the actual costs method. Instead of using the ATO mileage rate for 2021, you can therefore use the actual costs method instead.

If you're an employee, since the standard cents per km rates are optional, your employer can choose to use that rate or an alternative. Check the rates and rules with your employer before calculating reimbursements when using the cents per km method. Here’s our guide to mileage reimbursement for employees.

FAQ

Currently, you can claim reimbursement for 72 cents per km for the 2020–2021 and 2021–2022 tax years. If you are logging any trips from previous years, use the following ATO cents per km rates: 68 cents per km for the 2018/2019 and 2019/2020 tax years.
You can get a tax deduction for up to 5000 kilometres when using the cents per kilometre method.
The ATO mileage rate for the tax year 2020/2021 was 72 cents per km.

How to automate your mileage logbook

Manually filling out your logbook can get tedious - see how to automatically track trips for your mileage reimbursement or deductions.

This material has been prepared for general informational purposes only, and should not be taken as professional advice from Driversnote. You should consider seeking independent legal, taxation, or financial advice from a professional to check how this information relates to your own circumstances. Relevant laws also change from time to time.