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21 April, 2022 - 2 min read

ATO cents per km reimbursement rates for 2020

The ATO publishes updated cents per km reimbursement rates for every new tax year. The rates are meant to cover the expenses of individuals driving their own car for business-related purposes. 

The ATO mileage rate 2020

The rate for the 2020/2021 tax year is 72 cents per km

Use this rate to calculate your reimbursement for business-related car expenses from July 1st 2020 to June 30th, 2021.

How is the cents per km reimbursement rate for 2020 decided?

The ATO looks at the fixed and variable costs for a vehicle each year to determine the current cents per km rate. These expenses include tax, insurance, depreciation, fuel prices, maintenance and more. Use the cents per km rate for 2020 to calculate the reimbursement or deduction you are entitled to for each business kilometre you drive during that tax year.

Using the ATO mileage rate 2020 for business-related car expenses

As a sole trader

If you drive your personal vehicle for business purposes, use the ATO mileage rate 2020 to claim a deduction for your business kilometres at the upcoming tax recalculation (in the summer of 2021).

You can use the cents per km mileage rate if you use the cents per km method for your business-related car expenses. Keep in mind you can claim up to 5000 kilometres with the cents per km method per year.

Learn more about how to claim mileage as a sole trader in our guide.

As an employed individual

If your employer is reimbursing you for your business-related car expenses by a mileage allowance scheme, they might use the ATO mileage rate or set a rate that they see fit. If they use the ATO set rates, then you can use the current mileage rates for 2020 to calculate the reimbursement you are to be paid out. Since the rate has changed since last year, make sure you are updated on the latest changes in your workplace.

How to record your mileage for reimbursement

Apps are your go-to. By making use of your phone's GPS, you can easily track all your trips. They also store your information and generally allow you to classify each trip as personal or business, as per the rules set down by the ATO. We've got you covered with a simple and easy-to-use app whether you use Android or iOS. When using the Driversnote app, you can use the standard cents per kilometre reimbursement rate for 2020 or add your own mileage/allowance rate.

Other alternatives are keeping a paper mileage log or using a spreadsheet like Microsoft Excel or Google Sheets. Whatever you do, be sure to check out which information you need to record for your records to be considered adequate.

FAQ

The cents per kilometre rate for 2020 was 68 cents, and from 1st July for the new tax year, the rate increased to 72 cents per kilometre.
The 2021 ATO rate was 72 cents per business kilometre.

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.