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21 April, 2022 - 5 min read

ATO car log book requirements

You have to follow specific requirements for your car log book depending on the reimbursement or deduction method you use. In this article, we will look at what the requirements you need to follow are based on which reporting method you use for your car log.

Remember to keep your car log books for five years in case of audits by the ATO.

What is a car log book?

If you drive your personal car for work, you might receive business-related car expenses reimbursement from your employer, or claim a tax deduction from the ATO.

In order to prove the kilometres you’ve driven and the expenses associated with owning and operating your car, you need to have records - a car log book.

Your employer might specify which records they want, and the ATO also has rules that apply if you are claiming a tax deduction on your work-related car expenses.

ATO logbook requirements

If you use the ATO logbook method, you will need to record your business-related kilometres to ensure that you are getting reimbursed for all relevant expenses, with no limitation on how much you can claim (unlike the simpler cents per kilometre method, which has a cap of 5000 business km per year). 

According to the ATO logbook requirements, you must keep track of your driving and expenses in a car log book for a minimum of 12 weeks. The amount logged can be extrapolated to cover the rest of the year (assuming that your expenses will follow the same pattern). You can use the same logbook for the next 5 years of your tax claims, and you can start a new car log book at any time.

This 12 week period can take place at any time throughout the financial year - and if your car expenses fluctuate month-to-month, recording your kilometres and expenses year-round is a clever way to ensure that you maximise your tax deduction by accounting for all expenses and prioritising peak months.

The following details are required when using the logbook method:

  • General information
    • The period of time being tracked
    • Odometer readings at the beginning and end of the period
    • The total kilometres driven
    • The percentage of kilometres travelled for business
  • Information required for each trip logged:
    • Start time
    • Finish time
    • Total distance travelled
    • Odometer readings at the start and end of each trip
    • Reason for the journey

Another ATO logbook method requirement is that you keep all receipts and invoices of the car expenses you’ve had throughout the logbook period.

Based on the percentage of business kilometres you’ve driven, you’ll be able to claim that same percentage from all car expenses. For example, if 50% of your driving was work-related, you’ll be able to claim 50% of your car expenses.

Don’t forget - If you're claiming your car expenses as a tax deduction, you can only use the logbook method to claim expenses for a car that you own. The ATO will require evidence that you own the car to approve any car expense deductions. On the positive side, depreciation is also accounted for under the logbook method - calculated at 25% of the recorded value for your vehicle. 

Requirements for the actual costs method

To submit a claim using the actual costs method, you need to have records of the following:

  • The kilometres you’ve driven for business and private purposes
  • All receipts and invoices related to maintaining your car, such as fuel, repairs, servicing etc.
  • Loan or lease documents, and your registration papers
  • Details of how you calculated your claim

The biggest difference between the actual costs method and the logbook method is that you are required to record all of your expenses and mileage throughout the whole year. Compare this to the logbook method, where you are able to calculate your deduction based on any 12 week period.

The cents per kilometre method requirements

Under the cents per kilometre method, the records you need to keep are much more straightforward. Whether your employer is reimbursing your expenses or you are claiming a tax deduction, your requirements are simple. You will need to add to your car log:

  • The total kilometres driven
  • The percentage of kilometres driven for business purposes

If you are using the cents per kilometre method for your tax return, you will also need to show evidence that you own the car, as the standard rate accounts for ownership costs including depreciation, registration, insurance, fuel, and maintenance. 

Although you don’t need to provide written evidence, you have to be able to show that you drove the kilometres being claimed and how you calculated your claim. Common ways of showing this are through an automatic logbook application, or by providing diary records of work-related driving.

Car log book formats

Paper, diary, account book, digital spreadsheets, CSV files, PDF files, and XLSX (Microsoft Excel) are all accepted by the ATO. In other words, the format does not matter as long as the right records are present. Most logbook apps nowadays will allow you to save your report in multiple formats. 

Your employer should inform you which records they need, which includes the formats that they can process.

The ATO actually provides a digital logbook, but it does not include automatic trip logging. Paper logbooks are available from many newsagents and are suitable so long as you remember to fill them in at the start and end of each trip when using the logbook method. 

Should you prefer an automatic solution, an automated car log book app can help you to record everything you need to claim your work-related car expenses from the ATO or your employer. Alternatively, you can also try an ATO compliant log book template in PDF or Excel

In case you get audited by the ATO

If you get audited, the ATO can ask to see your log book, which will be accepted in any of the formats mentioned above. They will also ask for proof of your car expenses in the form of tax invoices or receipts.

To speed up the process and avoid errors, you can order your car mileage logs and records by year, of course maintaining a minimum of five years’ data as per the ATO vehicle log book requirements. A logbook app such as Driversnote can be incredibly useful in this case as it can automatically track all your trips - that way even if you forget to track a trip manually, you will be covered through automatic tracking.

FAQ

If you use the ATO logbook method, you are required to record the odometer readings of your car at the beginning and end of the logbook period, as well as the readings at the start and end of each trip you take.

The actual expenses and cents per km method do not require odometer readings, so long as you have another way of recording each trip, e.g. an automatic mileage tracker.

If you receive car expenses reimbursement from your employer, it will be up to them to decide the frequency of odometer readings you must note down.

If you drive your car for both business and personal use, you need to be able to show the portion of use that is for business. You work this out as a percentage of kilometres driven for both business and personal use. That means keeping a log of all trips and then calculating the share used for business.
Whether you are an individual taxpayer or self-employed, the ATO requires you to keep your records for five years from when you lodge your tax return, in case they need you to substantiate your claims.

 

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.