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How to Claim Motor Vehicle Expenses in Australia: 2024–25 Guide by Trinity Accounting Practice

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If you use your car for business or work-related travel in Australia, you may be eligible to claim motor vehicle expenses on your tax return. For the 2024–25 financial year, the ATO allows two main methods: Cents per Kilometre and Logbook Method.

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At Trinity Accounting Practice, we help you choose the best method that maximizes your deduction and ensures compliance with current ATO rules.

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1. Cents per Kilometre Method

This method is simple and convenient, ideal for those with lower business use.

Key details:

• 💰 Rate: 88 cents per kilometre for 2024–25
• 🚗 Maximum: Up to 5,000 business kilometres per vehicle per year
• 📋 No logbook needed, but you must show a reasonable basis for your calculation (e.g. diary, rosters, client visits)

✅ This method includes all car running costs like fuel, registration, insurance, servicing, and depreciation — no need to keep receipts.

💡 Best suited for: Employees or sole traders who occasionally use their car for work and want a quick, no-fuss way to claim.

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2. Logbook Method

This method is more detailed but offers higher tax deductions if your business use is significant.

You must:

• Keep a valid logbook for 12 continuous weeks (record date, purpose, odometer start/end, kilometres travelled)
• Retain all car-related receipts (fuel, insurance, repairs, servicing, etc.)
• Calculate the business-use percentage and apply it to total car costs

📌 You can claim:

• Fuel & oil
• Registration & insurance
• Lease payments or interest on car loans
• Repairs, servicing, tyres
• Depreciation (limited — see below)

💡 Best suited for: Sole traders, business owners, and contractors with high work-related car usage.

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3. Car Depreciation Limit for 2024–25

If you own the car, you may claim depreciation. But the ATO caps this based on luxury car limits.

• 🚫 Depreciation cost limit: $69,674 (for cars used from 1 July 2024)
• 🚫 Maximum GST claim: 1/11th of the cap = $6,334 (approx.)

If your car costs more than the limit, you can only claim up to the cap, not the full price.

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4. Exempt Vehicles – No Depreciation Cap

Some vehicles are exempt from the depreciation cost limit, including:

• Heavy vehicles like trucks, vans, utes with a payload over 1 tonne
• Buses designed to carry 9+ passengers
• Vehicles designed primarily to carry loads, not passengers

💡 Many tradies and contractors who drive dual cabs or commercial vans may fall into this category — Trinity Accounting Practice can assess this for you.

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5. Choosing the Right Method with Trinity Accounting Practice

Making the right choice can significantly reduce your taxable income. At Trinity Accounting Practice, we:

• Help you determine the best method for your business
• Ensure your records are ATO-compliant
• Maximize your vehicle expense deductions
• Provide advice tailored to sole traders, contractors, company directors, and business owners

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📍 Located at 159 Stoney Creek Road Beverly Hills NSW 2209, we offer expert advice and personalised service.

📅 Weekend & after-hours appointments available!
☎️ 02 9543 6804
🌐 www.trinitygroup.com.au
📅 Booking Link: https://calendly.com/ramy-hanna

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