UPDATED FEB 22, 2021 • 2 MIN READ
For work-related mileage incurred from July 1, 2020, 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:
Here is the ATO's announcement of the 2020 mileage rates with a bit more information. Learn more about historic cents per km rates here.
Starting from the 2020/2021 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 kilometre method is $0.72 per km driven for business.
Usually, when people talk about the mileage rate or the cents per kilometre rate, they mean the one used for business - that is when you drive your personal vehicle for business purposes and are reimbursed the costs. The ATO sets the standard cents per kilometre rate each year, though if you are an employee the rates offered by your employer may be different.
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 their rate and the rules for reimbursement, but the ATO's standard rate is the standard. If you're paid more per kilometre than the ATO’s standard rate, or if you’re paid a mileage 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.
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If you're an employee, since the standard 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. Here’s our guide to mileage reimbursement for employees.
If you're self-employed, you have a few more options to calculate your mileage deductions.
As a self-employed entrepreneur or a business owner, you always have the option to calculate 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. Read more about your options here.
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.
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.
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.