ATO Logbook Method: How to Claim Car Expenses the Right Way

The ATO logbook method in one minute

The logbook method is how you claim car expenses when you drive a lot for work. You keep a logbook for 12 continuous weeks, work out what share of your driving was business, and then claim that percentage of your actual car costs for the year: fuel, registration, insurance, servicing, and the decline in value of the car. There is no 5,000 kilometre cap, which is why it usually beats the cents per km method once your business driving is high.

The catch is the paperwork. A logbook that misses odometer readings, or a year of expenses you can't back with receipts, gets the claim cut or disallowed. This guide walks the mechanics the way the Australian Taxation Office (ATO) applies them, with the current-year figures and a worked example.

What a valid ATO logbook must record

The ATO wants a logbook that runs for a continuous period of at least 12 weeks, and that period has to be representative of your driving across the whole year. If you pick a quiet fortnight over the holidays, your business-use percentage will be low and so will your claim; if you pick your busiest 12 weeks, the ATO can argue it overstates your normal pattern. Choose a stretch that looks like a typical few months.

For every work-related journey during the logbook period, record:

• The date the journey started and ended
• The reason for the journey (the business purpose, not just "work")
• The odometer reading at the start and end of the journey
• The total kilometres travelled

On top of the per-journey entries, note the odometer readings at the start and end of the logbook period, and the odometer readings at the start and end of each income year (1 July and 30 June) that you use the logbook for. Those year-end readings are what let you scale a 12-week sample up to a full year of expenses.

You also record the car's make, model, engine capacity, and registration number. Keep the logbook itself for five years after the last return it supports, alongside your expense records.

How to work out your business-use percentage

The business-use percentage is one division: work-related kilometres divided by total kilometres over the logbook period.

Say you drive 5,000 kilometres during your 12 weeks, and your logbook shows 4,000 of them were for business. Your business-use percentage is 4,000 ÷ 5,000 = 80%. That single figure then applies to every eligible car expense for the income year.

One trap sits inside that division: your regular commute from home to a fixed place of work is private travel, not business, so those kilometres go in the "total" but not the "work-related" side. The main exception is when your home is your base of business, in which case trips from home to client sites usually count. Getting the commute classification wrong is the fastest way to inflate a percentage the ATO will later knock down.

Which car expenses you can claim

With your percentage set, you claim that share of the car's actual running and ownership costs:

Fuel and oil are the one line where the ATO accepts a reasonable estimate instead of a shoebox of dockets, worked out from your odometer readings, the car's fuel consumption, and the average fuel price for the year. Every other expense needs a receipt. That is the real weight of the logbook method: not the 12 weeks of trip logging, but a full financial year of vehicle receipts you can produce if asked.

If you are registered for GST, you also claim GST credits on the business-use portion of these costs through your BAS. See BAS due dates for the reporting cycle.

Car depreciation and the car limit

Depreciation, which the ATO calls the decline in value, is the part of a logbook claim people most often get wrong. You don't deduct the price of the car in one hit under this method. You spread it over the car's effective life, which the ATO sets at around eight years for a typical passenger car, and you claim your business-use percentage of each year's decline.

Two methods are available:

• Prime cost (straight line): the same dollar amount each year. Over an eight-year life that is 12.5% of the cost per year.
• Diminishing value: a bigger deduction early, tapering off. For assets held after 10 May 2006 the rate is 200% ÷ effective life, so 25% of the written-down value each year.

Then the ceiling. If your car cost more than the car limit, you can only depreciate up to that limit, not the full price. The car limit is $69,674 for 2025-26 and $69,883 for 2026-27. Buy a $90,000 car and your depreciation is worked out on $69,883, not $90,000. The same cap flows through to GST: the most GST credit you can claim on the car itself is one-eleventh of the limit, which is $6,353 for 2026-27 (and $6,334 for 2025-26).

A worked example: logbook vs cents per km

Meet Priya, a sole trader mobile physiotherapist in Brisbane who drives between clients all day. Her 12-week logbook shows 4,000 of 5,000 kilometres were business, so her business-use percentage is 80%. Across the full income year her car costs add up like this:

• Fuel: $3,200
• Registration: $900
• Insurance: $1,300
• Servicing, repairs and tyres: $1,400
• Decline in value: her car cost $40,000 (under the car limit), so prime cost at 12.5% = $5,000

That is $11,800 in total running and ownership costs. Her logbook deduction is 80% of $11,800 = $9,440.

Now compare the cents per km method. Priya does roughly 16,000 kilometres over the year, about 12,800 of them for business, but that method caps her at 5,000 kilometres. At the 2026-27 rate of 91 cents, her claim would be 5,000 × $0.91 = $4,550. The logbook method returns more than double the deduction, because the cap throws away her extra business kilometres. The cents per km calculator shows what those capped kilometres would have been worth, which is the number to weigh against the extra record-keeping.

The logbook wins for Priya because she drives well over 5,000 business kilometres and her running costs are real. A low-kilometre worker with a cheap, paid-off car often lands the other way. Rideshare and delivery drivers, whose cars rack up tens of thousands of business kilometres, come out ahead on the logbook, which is why the Uber driver deduction guide leans on it.

Common logbook mistakes that get claims disallowed

• No odometer readings. A diary of trips without start and end odometer figures is not a valid logbook. The ATO can reject the whole business-use percentage, dropping you back to the capped cents per km method.
• An unrepresentative 12 weeks. Logging only your busiest stretch and applying that percentage to a quieter year overstates the claim. Pick a normal period.
• Counting the commute as business. Home to a regular workplace is private travel. Including it is the single most common reason a percentage gets cut on review.
• Deducting the full car price. The car is depreciated over its effective life and capped at the car limit, not written off in one year under this method.
• No expense receipts. The logbook fixes your percentage, but you still need a year of receipts for fuel, rego, insurance and servicing. Missing receipts mean missing deductions.
• Letting the logbook lapse. A logbook is valid for five years, but if your work pattern changes materially, or you switch cars, you need a fresh 12 weeks.

Keeping your logbook and receipts organised

The 12 weeks of trip logging is the light part. The heavy part is holding a full year of vehicle receipts you can produce if the ATO asks. That is where a capture tool earns its keep.

SparkReceipt's receipt scanner reads fuel dockets, registration notices, insurance invoices and service bills and files them as categorised, searchable records, so a year of vehicle expenses is sitting in one place at tax time instead of fading on a dashboard. The mileage tracker logs your business trips by GPS with a business or personal tag on each one, which keeps the trip side of your records running through the year. You still write down your odometer readings, since the logbook method needs them and the app doesn't capture the odometer, but the receipts and the trip log are the parts that usually go missing, and those are handled. Pro and Elite both start with a 7-day free trial on the pricing page, and you can move from Pro to Elite when your document volume grows.

For the broader picture of what a sole trader can claim beyond the car, see sole trader tax deductions, and for how long to keep all of it, ATO record keeping requirements.

Frequently asked questions

How long does an ATO logbook last?

A logbook is valid for five years from the year you start it, provided your circumstances stay roughly the same, and you must keep it and your odometer records for five years after the last income year you rely on them. Start a new 12-week logbook if your work pattern changes significantly, your work locations change, or you buy a different car.

Can I switch between the logbook and cents per km methods?

Yes. You choose a method each income year and you are not locked in. Many sole traders use cents per km in a low-driving year and switch to the logbook when their business kilometres climb past the 5,000 cap.

What if I lose some fuel receipts?

Fuel and oil are the one expense where the ATO accepts a reasonable estimate instead of receipts, based on your odometer readings, the car's fuel consumption, and the average fuel price for the year. Every other car expense, registration, insurance, servicing and the rest, needs a receipt to be claimed.

Does the logbook method have a kilometre limit?

No. Unlike the cents per km method, which caps you at 5,000 business kilometres per car, the logbook method has no kilometre ceiling. You claim your business-use percentage of actual costs no matter how far you drive, which is exactly why high-kilometre drivers use it.

Can I claim the full price of the car in one year?

Not under the logbook method. You claim the decline in value over the car's effective life, around eight years for a car, and only up to the car limit ($69,883 for 2026-27) if the car cost more than that. A separate instant asset write-off can apply to business assets in some cases; see the instant asset write-off guide for how that works and when it doesn't.

Do I need a logbook if I only drive occasionally for work?

If your business driving is under 5,000 kilometres a year, the cents per km method is simpler and needs only a reasonable estimate of your kilometres, not a full logbook. The logbook method is worth the effort once your business driving or running costs are high enough that the 5,000 km cap is leaving money on the table.

Key takeaways

• The logbook method claims your business-use percentage of actual car costs, with no 5,000 km cap, so it usually beats cents per km for high-kilometre drivers.
• A valid logbook runs for 12 continuous, representative weeks and records the date, purpose, start and end odometer, and total kilometres of every business journey.
• Business-use percentage is work-related kilometres divided by total kilometres over the logbook period; the commute is private travel and stays out of the business side.
• Depreciation is spread over the car's effective life (around eight years) and capped at the car limit: $69,883 for 2026-27, with a matching GST credit cap of $6,353.
• The logbook fixes your percentage, but you still need a full year of receipts for fuel, registration, insurance and servicing to claim the costs.

Rates and thresholds verified against ATO guidance as of September 2026. Car limits and rates change each income year, and depreciation choices depend on your circumstances, so check current ATO guidance and speak to a registered tax agent before relying on any figure here.