You have to follow specific requirements for your car log book depending on the reimbursement or deduction method you use.
If you drive your personal vehicle for work, you might receive business-related car expenses reimbursement if you are employed, or claim a tax deduction from the ATO as an employee, self-employed, or company.
In order to prove the kilometres you’ve driven and the expenses associated with owning and operating your car, you need to have records - a car log book, also known as a vehicle log book.
The ATO also has rules that apply if you are claiming a tax deduction on your work-related car expenses.
If you use the ATO logbook method, you will need to record your business-related kilometres to ensure that you are getting reimbursed for all relevant expenses, with no limitation on how much you can claim (unlike the simpler cents per kilometre method, which has a cap of 5000 business km per year).
You must keep track of your business and personal driving for a minimum of 12 weeks. The kilometres logged can be extrapolated to cover the rest of the year (assuming that your driving will remain similar). You can use the same logbook for the next 5 years of your tax claims, and you can start a new car log book at any time.
This 12 week period can take place at any time throughout the financial year - and if your car expenses fluctuate month-to-month, recording your kilometres and expenses year-round is a clever way to ensure that you maximise your tax deduction by accounting for all expenses and prioritising peak months.
The second ATO logbook method requirement is that you keep all receipts and invoices of the car expenses you have throoughout the year.
Based on the percentage of business kilometres you’ve driven, you’ll be able to claim that same percentage from all car expenses. For example, if 50% of your driving was work-related, you’ll be able to claim 50% of your car expenses.
Don’t forget - If you're claiming your car expenses as a tax deduction, you can only use the logbook method to claim expenses for a car that you own. The ATO will require evidence that you own the car to approve any car expense deductions. On the positive side, depreciation is also accounted for under the logbook method. See our dedicated article on claiming vehicle depreciation.
To submit a claim using the actual costs method, you need to have records of the following:
The biggest difference between the actual costs method and the logbook method is that you are required to record all of your driving throughout the whole year. Compare this to the logbook method, where you are able to calculate your deduction based on any 12 week period.
Under the cents per kilometre method, the records you need to keep are much more straightforward. The rate for the 2024/2025 tax year is 88 cents per km. See more about the new ATO cents per km 2024 rates applicable to the 2024/2025 tax year. Whether your employer is reimbursing your expenses or you are claiming a tax deduction, your requirements are simple. You will need to add to your car log:
If you are using the cents per kilometre method for your tax return, you will also need to show evidence that you own the car, as the standard rate accounts for ownership costs including depreciation, registration, insurance, fuel, and maintenance.
Although you don’t need to provide written evidence, you have to be able to show that you drove the kilometres being claimed and how you calculated your claim. Common ways of showing this are through an automatic logbook application, or by providing diary records of work-related driving.
Paper, diary, account book, digital spreadsheets, CSV files, PDF files, and XLSX (Microsoft Excel) are all accepted by the ATO. In other words, the format does not matter as long as the right records are present. Most logbook apps nowadays will allow you to save your report in multiple formats.
Your employer should inform you which records they need, which includes the formats that they can process.
The ATO actually provides a digital logbook, but it does not include automatic trip logging. Paper logbooks are available from many newsagents and are suitable so long as you remember to fill them in at the start and end of each trip when using the logbook method.
Should you prefer an automatic solution, an automated car log book app can help you to record everything you need to claim your work-related car expenses from the ATO or your employer. Alternatively, you can also try an ATO compliant log book template in PDF or Excel.
Remember to keep your car log books for five years in case of audits by the ATO.
If you get audited, the ATO can ask to see your km log book, which will be accepted in any of the formats mentioned above. They will also ask for proof of your car expenses in the form of tax invoices or receipts.
To speed up the process and avoid errors, you can order your car mileage logs and records by year, of course maintaining a minimum of five years’ data as per the ATO vehicle log book requirements. A km logbook app such as Driversnote can be incredibly useful in this case as it can automatically track all your trips - that way even if you forget to track a trip manually, you will be covered through automatic tracking.
