The logbook method lets you claim a percentage of all actual vehicle running costs — fuel, insurance, registration, servicing, and depreciation — based on how much of your driving is for work. It requires a 12-week logbook but typically produces a higher deduction than the cents-per-kilometre method for people who drive extensively for work.
How the Logbook Method Works
- Keep a logbook for 12 consecutive weeks (see below)
- Calculate the business-use percentage from the logbook
- Claim that percentage of all annual vehicle running costs
- The logbook is valid for 5 years (same vehicle, similar usage pattern)
- Record odometer readings at the start and end of each income year
How to Keep a Valid Logbook
Your logbook must record, for every trip made during the 12-week period:
- Date of the trip
- Start and end destination (e.g., “Parramatta office” to “Chatswood client”)
- Reason for the trip (work reason or private)
- Start and end odometer reading (or kilometres travelled)
It must cover all trips — both work and private — during the 12-week period. It does not need to be in a specific format, but ATO-approved logbook books are available at stationery stores and post offices, and apps (such as the ATO’s own logbook app) are accepted.
Key rules:
- The 12-week period must be representative of your typical annual use
- If your work pattern changes significantly (e.g., you change jobs), you should start a new logbook
- You must have odometer readings at 1 July for each income year the logbook is used
Calculating Business-Use Percentage
At the end of the 12 weeks:
$$ \text{Business-use %} = \frac{\text{Work kilometres}}{\text{Total kilometres}} \times 100 $$
Example:
- Total kilometres driven in 12 weeks: 4,200 km
- Work-related kilometres: 2,940 km
- Business-use percentage: 70%
This percentage is then applied to all actual annual vehicle costs.
What Costs You Can Claim
Apply the business-use percentage to each of the following:
| Expense | Example annual cost | At 70% business use |
|---|---|---|
| Fuel | $3,200 | $2,240 |
| Insurance and CTP | $1,400 | $980 |
| Registration | $800 | $560 |
| Servicing and repairs | $1,200 | $840 |
| Loan interest (if financed) | $2,000 | $1,400 |
| Depreciation | $5,000 | $3,500 |
| Total | $13,600 | $9,520 |
Depreciation is calculated using the diminishing value method or the prime cost method on the vehicle’s purchase price (up to the car limit — $69,674 for FY2025–26). The car limit applies to the depreciation calculation even if the vehicle cost more.
Depreciation — Key Numbers
Prime cost method: (Cost ÷ Effective life) × days owned ÷ 365 Diminishing value: Opening adjustable value × (2 ÷ effective life) × days ÷ 365
For cars, the ATO’s standard effective life is 8 years (12.5% straight-line, or 25% DV).
The luxury car limit (also called the car limit) for FY2025–26 is $69,674. If the car cost more than this, depreciation is calculated on the limit, not the full cost.
Logbook vs Cents Per Kilometre — Which Gives the Bigger Deduction?
Under cents per kilometre: max 5,000 km × $0.88 = $4,400
Under the logbook method: the entire work proportion of all actual costs, with no cap — so for a person who drives 20,000 km per year at 70% work use, with total vehicle costs of $13,600, the deduction is $9,520.
The logbook method is almost always better for high-kilometre workers.
Frequently Asked Questions
Does the logbook have to be kept in a physical book? No. A digital record — spreadsheet, app, or electronic logbook — is acceptable. The ATO’s myDeductions app has a built-in logbook function.
What if I change cars during the year? A logbook is vehicle-specific. If you get a new car, you need to start a new logbook for it. If both vehicles are used for work in the same year, you may have two claims.
My employer provides a company car but I also use my own car for some work trips. Can I still claim? If you use your private vehicle for work trips that are not covered by the company car, yes — you can claim those trips using either method.
I forgot to keep a logbook but did drive for work. Can I use the cents-per-km method instead? Yes. You can switch to the cents-per-km method (no logbook required) for any year where you do not have a valid logbook. The trade-off is the 5,000km cap.
This article provides general tax information. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register.