23 February, 2021

ATO cents per km rates for 2021, 2022 and back. 

UPDATED • 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: 

  • $0.72 per kilometre driven for business, up to a maximum of 5000km in one financial year.

Learn more about historic cents per km rates here.

ATO cents per km rate 2022 

The ATO cents per km rate for 2022 is currently the same as in 2021. The current mileage rate of $0.72 per kilometre driven for business applies until June 2022. For trips taken after June 2022, you need to check the ATO website for the new rates. Keep in mind that when you are using the cents per km method, you can only get reimbursement for up to 5000km in one financial year. To get actual expenses reimbursement, you should be using the logbook method instead. 

The current ATO cents per km rate for business

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 when using the cents per km method for your mileage claim. 

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 (sometimes referred to as the ato km rate), 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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Can I use the ATO cents per km rates for reimbursement?

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. 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. 

Is there an alternative to using the cents per km rate?

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. Instead of using the ATO mileage rate for 2021, you can therefore use the actual costs method instead. 

How do I track & record mileage?

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 kilometer reimbursement rate for 2021 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.

 

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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.