How To Keep an ATO Vehicle Log Book
You need to keep an ATO-compliant vehicle log book that will serve as proof that you have driven the kilometres for business purposes you claim a deduction for.
The logbook method
In general, if you use your car frequently for work, the logbook method will result in a larger tax refund than the cents per kilometre method.
But what is a car log book? In this article we will explain what you need to document to have proof when claiming deductions.
Using the logbook method allows you to claim a percentage of all of your car expenses (fuel, registration, maintenance, interest on loans etc.) The other method of claiming car expenses - the cents per kilometre method, allows you to claim a fixed rate per business kilometre.
Filling out your ATO vehicle log book
In order to make sure your ATO vehicle log book is compliant, there are a few things that you must fill out as they can cost you your whole deduction claim.
Make sure to record:
- The start and end date of each journey
- the number of kilometres travelled for each journey
- the odometer readings of your vehicle at the start and end of each journey
- the reason for the journey
- the business-use percentage for the logbook period
- the vehicle's make, model, engine capacity, and registration number
- when the logbook period begins and ends
- the total number of kilometres you’ve driven during the logbook period
- the odometer readings of the car at the start and end of the logbook period
- the odometer readings at the beginning and end of each subsequent income year your logbook is valid for
Keep in mind that each motor vehicle log book you have is valid for five years, but you can start a new one at any time. If you use a car logbook app, a lot of this information will be logged automatically.
It's critical to keep track of every trip you take in your car for 12 weeks, not just work trips. If you fail to do so, the ATO will consider your logbook invalid and may reject all of your car expense claims.
Finally, if you use the logbook method to claim actual vehicle expenses, remember to keep all receipts and invoices for the expenses you’ve incurred throughout the year.
Is the logbook method very time-consuming?
The logbook method might take quite some time depending on how many trips you take, but you will make sure to claim all actual expenses related to using your vehicle for business purposes. However, using an app to log your trips should reduce the time you spend on it significantly. By using a mileage tracking app, you don’t have to log your trips anymore as the app can do it automatically for you. You will only need to keep track of your receipts.
Types of vehicle log books
There are a few motor vehicle log book options out there. The most classic option is the physical log book which you can purchase online or from various supply shops. Nowadays, many people use spreadsheets, Excel files and PDF files as a logbook. Using a digital vehicle log book such as a logbook app is definitely preferable nowadays as they retain your logged information, giving you peace of mind should you be audited at a later stage.
Using a logbook app as a motor vehicle log book is growing in popularity as it helps you spend a lot less time logging trips, and reviewing and inputting data manually. The vehicle log book app does most of the work for you.
If you are an employer or a manager, the motor vehicle log book app option may be the best choice for you as it will allow you to quickly review and validate your team’s reimbursement claims with easy workflows for submitting and approving mileage. You will also be able to receive accurate and consistent mileage reports from your team and get an overview of your team’s status easily. You can try the Driversnote ATO compliant log book app for free. Find more information about claiming work-related car expenses in our ATO mileage reimbursement guide.
How to calculate your claim with your vehicle log book
If you want to figure out how much you can claim when using the logbook method, you can try the following method for estimating your reimbursement.
- To begin with, make sure you are keeping an accurate motor vehicle log book
- Calculate your business-use percentage by dividing the total distance travelled by the distance travelled for business and multiplying by 100.
- Total your car expenses for the fiscal year.
- Multiply your total car expenses by your percentage of business use.
If you claim your work kilometres through the cents per kilometre method, you still keep an ATO vehicle log book, but there’s no need to collect receipts of your car-related expenses.
Use our cents per km calculator to see how much you’ll be able to claim for your business-related driving.
Learn about the rules of reimbursing employees for their car expenses or deducting expenses as an employee or self-employed individual.
If you are claiming vehicle expenses for business purposes, you must keep proper records in order for the ATO to approve your claim. We will walk you through...
The days of manually documenting a week's worth of information and struggling to remember the work errand you were running around 6:30 p.m. last Thursday are long gone, thanks to mobile apps that track your trips and produce compliant mileage logs.