The logbook method for car expenses: how to keep one and what you can claim
The cents-per-kilometre method is easy but capped at 5,000 kilometres. If you drive more than that for business, or your car is expensive to run, the logbook method usually gives a bigger deduction, and it is the only way to claim depreciation and interest on the car. The cost is twelve weeks of writing down trips once every five years. Here is how to do it properly and what it unlocks.
Updated 16 September 2026. General information only, not tax advice.
Which vehicles and which trips
The logbook method is one of the two methods for a car, which the ATO defines as a vehicle designed to carry fewer than nine passengers and a load under one tonne. Utes and vans over one tonne are not cars; they are claimed on actual costs at a business percentage anyway, and a logbook is the best evidence for that percentage too.
Business trips are travel between work locations, to clients, suppliers, the bank, the post office, job sites, and from home to those places if your home is your business base or you carry bulky equipment. Home to a regular fixed workplace is private. See travel and accommodation deductions for the boundary.
Keeping the logbook
Choose 12 continuous weeks that represent your normal use; avoid a period that is unusually busy or quiet. For every business trip, record:
- The date.
- Odometer reading at the start and end of the trip.
- Kilometres travelled.
- The purpose (client visit, Bunnings run, site inspection).
Also record the odometer at the start and end of the 12 weeks, and the car’s make, model, registration and engine capacity. A paper logbook from the newsagent works; so does an app that logs trips by GPS, provided you can produce the entries. At the end, business kilometres divided by total kilometres is your business percentage.
Record the odometer reading on 1 July and 30 June every year the logbook is in use. Those two numbers give the year’s total kilometres, which is what you multiply the percentage against for fuel estimates.
How long it lasts
A logbook is valid for five income years, including the year you kept it. Start a new one earlier if your pattern of use changes materially, for example you take on a job that changes the mix of business and private driving, or you replace the car and use it differently. If you replace the car with the same pattern of use, you can nominate the new car under the existing logbook; note the change and the odometer readings.
What you claim
Every cost of running the car, at the business percentage:
- Fuel and oil. Keep receipts, or estimate from the year’s total kilometres and the car’s fuel consumption. For an electric car the ATO publishes a per-kilometre shortcut for home charging.
- Registration and insurance.
- Servicing, repairs and tyres.
- Interest on a loan used to buy the car, or lease payments if it is leased.
- Depreciation of the car, subject to the ATO car limit, or the instant asset write-off if the cost is under the threshold.
- Roadside assistance, car washes, and the business share of a dash cam or accessories.
Tolls and parking for business trips are claimed in full separately, not at the percentage. Fines are never deductible.
A worked example
A mobile physio drives 24,000 kilometres a year, of which her logbook shows 75% is business. Fuel $3,400, rego $900, insurance $1,300, servicing and tyres $1,200, interest on the car loan $1,100, depreciation $6,000: total $13,900. At 75% that is a $10,425 deduction, plus $280 of business parking in full. Under cents per kilometre she would have been capped at 5,000 km × 88 cents = $4,400 for 2025-26. The logbook more than doubles her claim.
GST on car costs
If you are registered for GST, claim the business percentage of the GST on fuel, servicing, tyres, insurance (the GST component only) and repairs on each BAS. Registration is mostly GST-free apart from the insurance component. The GST on the purchase of the car itself is claimable at the business percentage, capped at one eleventh of the car limit. See buying a car for your business.
Logbook or cents per kilometre?
Cents per kilometre: no logbook needed, no receipts for running costs, but capped at 5,000 business kilometres and the rate covers everything including depreciation. Logbook: more records, every cost claimable, no cap. If you drive under 5,000 business kilometres in a cheap-to-run car, cents per kilometre is fine. If you drive more, or the car is expensive, or you want to claim depreciation and interest, keep the logbook. You can switch between methods from year to year, but you cannot use both for the same car in the same year. See motor vehicle deductions for the cents-per-kilometre detail. FlowFi logs trips and running costs from your bank statement so either method has its evidence.
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Frequently asked questions
Can I keep a logbook for less than 12 weeks if I only started the business in May?
If the business started less than 12 weeks before 30 June, the logbook can run into the next year; the ATO accepts a period that continues past year end as long as it is 12 continuous weeks.
Do I need fuel receipts if I have a logbook?
You can estimate fuel from odometer readings and average consumption instead of keeping every receipt, but you need receipts for all other running costs. Most people keep the fuel receipts anyway; a bank statement line is acceptable evidence for fuel.
Can I use a logbook for two cars?
Yes, but each car needs its own logbook and its own percentage. You cannot use one car’s logbook for another unless you are replacing it with the same pattern of use.
General information only, not tax advice. Check your own situation with a registered tax agent or the ATO.
Car costs categorised, trips logged
FlowFi pulls fuel, rego, insurance and servicing from your bank statement and applies your logbook percentage to each.
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