What the cents per km method is
It is the simple way to claim a vehicle. You count your business kilometres for the year, multiply by one rate, and that single figure covers everything — fuel, rego, insurance, servicing, tyres, depreciation, the lot. You do not add fuel receipts on top; they are already in the rate.
The rate, and where it comes from
| Income year | Rate | Max claim at 5,000 km |
|---|---|---|
| 2026–27 | 91c per km | $4,550 |
| 2025–26 | 88c per km | $4,400 |
The 91c rate for 2026–27 is set by a registered legislative instrument — the Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026 (F2026L00785, registered 23 June 2026). Its section 6 says the rate for the income year commencing 1 July 2026 is 91 cents per kilometre.
Three rules that catch tradies out
- 5,000 km is the ceiling, per car. Drive 9,000 business km and this method still only pays on 5,000. Two cars, two separate 5,000 km limits.
- Home to work does not count. Ordinary commuting is private travel. Site to site, yard to job, supplier runs and job to job all count.
- Everything is in the rate. You cannot claim the rate and your fuel, rego or servicing separately. That is the most common double-claim there is.
Cents per km, or a logbook?
Rough rule: under about 5,000 business kilometres, cents per km is simpler and usually close enough. Over it, the cap starts costing you and the logbook method — where you claim a percentage of your actual running costs — is generally worth more, especially on a newer ute where depreciation is real money. The logbook needs 12 continuous weeks of records, kept every five years.
Doing it without the shoebox
The hard part is not the sum. It is having the kilometres at all in June. Yamate logs a trip against the job you drove to, so the number that goes in the box above is one you can stand behind — and the same app quotes the job, invoices it, and puts your tax aside as the money lands.
FAQ
What is the cents per km rate for 2026-27?
91 cents per kilometre, for up to 5,000 business kilometres per car — a maximum claim of $4,550. It was 88 cents in 2025–26.
Can I claim more than 5,000 km?
Not under this method. Above 5,000 business kilometres you need the logbook method, which has no cap but needs 12 continuous weeks of records.
Does driving to work count?
No. Home to your regular place of work is private travel. Travel between jobs, to a supplier, or to a site that is not your regular base does count.
Do I need receipts for fuel?
Not for this method — fuel is already inside the rate, along with rego, insurance, servicing and depreciation. What you need is a reasonable record of the kilometres themselves.
Can I claim my ute if it is under finance?
The cents-per-km rate covers the running of the car regardless of how it is financed. Interest and finance arrangements are a separate question worth asking your accountant about.
More free tools for tradies
A general estimate for Australian taxpayers using the cents-per-kilometre method, not tax advice. It assumes the kilometres you enter are genuinely business kilometres and that you are eligible to use this method. The "what it saves you" line applies a flat 30c in the dollar and ignores your actual marginal rate, the Medicare levy and offsets. Rates checked 13 August 2026 against the registered instrument; check the ATO before you lodge.