If you drive your personal vehicle for business purposes, you might be entitled to claim mileage from the ATO. The term “ATO mileage” refers to the schemes the tax office offers for reimbursing employees, self-employed and business owners for such expenses.
ATO offers three different schemes by which you can claim your business mileage. Which one you use will depend on your situation.
- As an employee or a sole trader, or in a partnership where at least one partner who’s an individual, you can claim ATO mileage through the cents per km or logbook method
- For any other partnership, you can only use the logbook method to claim ATO mileage
- As a company, trust, or no matter the situation claiming mileage for vehicles not classified as a car, use the actual costs method
Keep in mind that as an employee, if you get reimbursed for your business driving from your employer, you won’t be able to also claim mileage from the ATO.
Cents per kilometre method
If you claim mileage through the cents per km method, you will have to do the following:
- Record your business driving in compliant logs.
- Multiply the kilometres by that year’s cents per km rate.
- Claim ATO mileage on your tax return.
Keep in mind you can claim up to 5000 km per year using this method.
The current 2021/2022 ATO mileage rate is 72 cents per kilometre. The rate is set by the ATO each year and covers all expenses of owning and driving your vehicle for the business portion of its use.
Logbook and Actual expenses methods
Claim mileage through the logbook or actual expenses method by also recording all business driving. Keep receipts and invoices of all expenses you’ve accrued owning and running your vehicle. Claim actual vehicle expenses for the percentage of business kilometres you’ve driven that year. For example, if 20% of your annual driving was business-related, you will be able to claim 20% of your vehicle expenses.
Learn more about the records you need to keep depending on the ATO mileage method you use.
FInd out more information about business-related driving deductions and reimbursement in our ATO mileage guide.
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Find out what the new ATO cents per kilometre rate is for 2022/2023 and how to use it. If you drive a car for business purposes, you can claim more per kilometre
The cents per km calculator in this article is based on the 2021 cents per km rate and allows you to estimate your business-related car expenses claim for the year.