ATO logbook method

The ATO logbook method is a way of claiming tax deductions for using your own car for business purposes. This method can be used by sole traders and partnerships claiming expenses for a car, and not other vehicles.

In order to claim car-related expenses with the logbook method, you will need to keep a logbook of your driving and all receipts for your car expenses throughout the year.

ATO logbook method records

You must ensure your ATO logbook is compliant in order to claim car expenses for your business-related driving. Your logbook should contain:

• The start and end days of the period that’s recorded in the logbook
• Your car’s odometer at the start and end of the logbook period
• Your car’s make, model, registration number and engine capacity
• The total number of kilometres driven during the period (both for business and personal purposes)
• Each trip you’ve driven during the logbook period
• The business use percentage of your car in that period

For each journey you should record the following:

• The number of kilometres driven
• The purpose of your trip (business or personal)
• The start and end date of your trip
• The odometer readings at the start and end of each trip

You must keep a logbook for at least 12 consecutive weeks to establish the car’s business use percentage. You can then use this logbook as proof of your business driving for the next 5 years. If you do this, you must keep on recording odometer readings during the years you use the established logbook.

However, you can always start a new logbook - especially if how much you drive changes, so you ensure you can deduct all the eligible expenses.

If you use multiple cars for business purposes, you should keep a separate logbook for each, as well as the receipts for your car expenses for each car.

Calculate how much you can claim with the ATO logbook method

To calculate how much you can claim with the ATO logbook method, you first need to work out your business use percentage. Do that by dividing the business distance you’ve travelled by the total distance, then multiply by 100. Add up all of your car expenses for the year, then multiply the expenses by the percentage of business use.

Here is a simple example of working out your deduction.

You’ve driven a total of 6000 kilometres throughout the income year. 2000 of them are for business purposes. You work out your car expenses at $5000 for the whole year.

2400 km / 6000 km = 0,4

0,4 x 100 = 40% of your driving was business-related

$5000 x 40% = $2000 you can claim

Read more about self-employed individuals claiming vehicle expenses from the ATO in our Self-employed car expense deductions guide.