How many kms can you claim for reimbursement without receipts?

In Australia, you can be reimbursed for up to 5,000kms without receipts using the per-kilometre rate.Alternatively, you can claim up to 5,000km of business mileage for tax deduction if you’re not reimbursed directly from your employer. If you drive more than that for business each year, you should use the logbook method to get a more accurate reimbursement.

As an employee, should I claim mileage deductions on my taxes if I drive for work?

This depends on your employer’s reimbursement scheme.If your employer reimburses you for business mileage using a cents-per-km method, you cannot claim business mileage deductions on your taxes, as you’ve already been properly reimbursed for it.However, if your employer uses a car allowance method that’s considered taxable income for you, you can claim business mileage deductions on your taxes using the ATO’s cents-per-km method.

As an employer, do I have to reimburse employees for mileage at the set ATO rate?

No, employers can set their own per-km rates to reimburse employees that are either more or less than the standard ATO rate.However, any amount per km above the standard ATO rate is considered taxable income, so be aware of taxation issues that may arise at tax time.

What vehicle expenses are tax deductible?

Vehicle expenses for business-related travel are tax-deductible for:Employees, if your employer doesn’t provide you with a tax-free reimbursement scheme, orEmployers, if you reimburse employees for vehicle expenses using an actual costs method.You can deduct the following vehicle expenses related to business travel:Fuel and oil expensesRegistration costsVehicle insurancesLease payments and interest chargesDepreciation valueCar servicesTyres and repairsElectricity chargesYou cannot claim:Capital costs, i.e. the purchase price of your carImprovement costs, i.e. tinted windows, winter protection, etc.Individual expenses if you’re already claiming, or being reimbursed for, mileage using a cents-per-km schemeClaiming individual expenses is done using the logbook method (see above), and is most valuable if you drive more than 5,000km annually for business purposes.

ATO Cents Per Kilometre: Car Allowance Guide 2025

Whether you’re a finance manager trying to sort out employee reimbursements, or an employee trying to see how much you can get reimbursed after driving to that conference last weekend, our guide to car mileage allowances in Australia will help.

In this guide, we’ve covered everything from eligible vehicles to what counts as mileage, how to record your mileage (and when you need to), and more.

What is mileage reimbursement?

Mileage reimbursement like anything involving the Australian Taxation Office — can be a little confusing. To make things more complicated, some terms — like “mileage reimbursement” and “car allowance” — are used interchangeably, although they’re not quite the same.

Here’s a quick primer if you’re unfamiliar:

Mileage reimbursement refers to a set rate that employees are reimbursed per kilometre for business mileage. The ATO (Australian Taxation Office) sets a standard mileage reimbursement rate, which as of July 2024 is currently $0.88.

This mileage reimbursement rate is intended to take into account all of the costs associated with driving and owning a vehicle — things like registration, fuel, insurance, servicing, even depreciation.

How a car allowance works, on the other hand, is when companies use a reimbursement scheme where they give employees a fixed amount every month or year to cover business-related driving expenses using a personal vehicle.

This is more common at companies where employees frequently drive for business, and it’s not based on individual monthly mileage. This type of motor vehicle allowance is part of the employee’s salary packaging.

What counts as business mileage

Of course, there are a number of rules and qualifications around what counts for reimbursable business mileage.

Typically, the following types of driving can be reimbursed as business mileage:

Driving to meetings or conferences that are for business but not at your typical workplace.

Running errands or getting supplies for the business

Traveling from your usual workplace to a secondary or alternate place of business (i.e. a second office or a client’s office for a business meeting).

Going on customer visits or visiting field sites.

Commuting between your home and standard workplace typically does not count as business mileage except in rare circumstances.

To reimburse your employees for mileage — or to get reimbursed, if you are an employee — there are two primary methods: the mileage reimbursement method (the easy way) or the logbook method (the more detailed way).

Please note that both of these methods are only applicable for your own car used for work purposes. If you have a company car that your employer pays the car costs for, you can’t claim mileage reimbursement.

How to use the mileage reimbursement method

The mileage reimbursement method — also called the kilometre method — is the easiest way to reimburse employees for mileage or claim business-related mileage tax deductions.

You don’t need receipts or a logbook to claim this deduction, but the ATO can ask for recorded evidence of how you calculated the business use of your car. For this reason, it’s a good idea to have employees keep record of their business mileage anyways, including:

How far they drove (in kms)

The trip dates

The trip purpose or how it’s related to the business

To calculate employee mileage reimbursements, simply multiply the number of kms driven by the current reimbursement rate ($0.88) to figure out the correct reimbursement amount.

For example, if you have an employee who travelled 1,200 kms over the course of the previous income year, their mileage reimbursement would be:

1,200 (kms) x 0.88 (km / m) = $1,056 AUD

Have employees traveling for business around Australia? Make sure you reimburse them for all of their business travel expenses — not just mileage — by using a per diem rate.

How to use the logbook method

The logbook method is more complicated, but it also provides more flexibility. The logbook method is also a good idea if your employees drive a lot for business. With the kilometre method, you can only get reimbursed for up to 5,000km per year, but with the logbook method, there’s no mileage cap.

The logbook method has three steps:

Preparing your logbook

Keeping records and receipts of running costs

Calculating your deduction

1. Keeping a logbook.

Keeping a logbook is pretty straightforward, but it does require detailed record keeping. The good news is, it doesn’t need to log every business drive you make for an entire tax year!

Instead, it simply needs to cover at least 12 continuous weeks that are “broadly representative” of the driving you do during the year.

For example, if you have several months that are very busy with driving, and several months that aren’t, your logbook should span both of those periods in order to be broadly representative. In your logbook, you need to include:

The start and end dates of the logbook period

Odometer readings for the start and end of the logbook period

The odometer reading at the start and end of each trip

The destination of each trip

The business purpose of each trip

Total number of kilometres travelled during each period

As long as your work and driving circumstances don’t change, your logbook will continue to be valid for five years. If you’re reusing a logbook from a previous year for this year’s tax return, you also need to include odometer readings from the start and end of the current tax year, or the period of the year in which you did work-related driving, and your work-related percentage based on the logbook.

2. Keeping records and receipts

In addition to your logbook, you need to keep all receipts (or keep diary records of) motor vehicle expenses. Deductible expenses include:

Fuel and oil receipts

Registration costs

Insurances

Interest on a car loan

Car services and regular upkeep

Tyres and general repairs

Tolls and parking fees during business use

You should also keep a record of your car’s depreciation value, based on the purchase price. The ATO can ask you to provide an explanation for how you determine depreciation, so be sure to use a standard depreciation formula, and keep notes on how you calculated it for your vehicle.

3. Calculating your deduction

Finally, you’ll want to calculate your deduction based on the costs of using your own vehicle for personal use proportionate to your business-related travel.

To calculate the percentage of business kilometres you drove, use the following formula:

( [total number of kms travelled for business during the logbook period] / [total number of kms driven during the logbook period] ) x 100

This will give you the percentage of work-related mileage for your vehicle use.

Next, add up the total expenses for the period you’re claiming — all of the receipts and records you saved from step 2.

Finally, find your work-related car expenses by multiplying your work-related percentage by the total amount of actual expenses. This is the amount you can claim as your deduction.

So, for example, let’s say you drove 1,000kms during the logbook period, and 600 kms for work during the logbook period. Your calculation would be:

[600 (work-related kms) / 1000 (total kms)] x 100 = 60% business-related travel

As a result, you’d be eligible to claim 60% of your total car expenses as a deduction.

The actual costs method

Finally, there’s a third method — the actual costs method — but it’s much less commonly used. You’ll use the actual costs method if:

The car you use for work-related travel doesn’t belong to you

The vehicle you use doesn’t fit the ATO’s definition of a “car,” i.e. a truck, motorcycle, or vehicle that can carry more than 9 passengers

In these cases you’ll claim a work-related travel deduction (as opposed to a car expense deduction) on your tax return rather than being reimbursed via the per-kilometre method or receiving a deduction via the logbook method.

To calculate your deduction using the actual costs method, you’ll:

Keep evidence of your work-related use of the vehicle. You can do this by keeping a logbook, similar to the logbook method, but it’s not a requirement.

Keep all original receipts of vehicle expenses.

Determine the depreciation of the vehicle based on the value of the vehicle and lifespan using an accepted depreciation method.

Calculate the percentage of your expenses that are for work-related travel based on the above details. This is the amount you can claim as a deduction.

Manage more than just your mileage reimbursements with Australia’s best business travel management companies. You’ll save time and stay organized while managing flights, hotels, rail, rental cars, and more.

What is the mileage reimbursement rate in Australia for 2025?

In Australia, business mileage reimbursement rates only apply to standard cars that are designed to carry less than one tonne and fewer than nine passengers.

The ATO mileage reimbursement rate for July 2024 - June 2025 is $0.88 / km.

Typically, the ATO updates this reimbursement rate at the beginning of each financial year in July, so stay tuned for updates.

Employers can choose to reimburse employees for mileage at any rate, including one lower or higher than the set ATO rate. Any amount reimbursed per km at or under the ATO rate is considered non-taxable income. For any amount reimbursed above the current ATO rate, the amount paid out above the current rate is taxable income.

Mileage And Car Allowance Policy Template

Define mileage and car allowances clearly with our practical handbook. Get your team road-ready.

Is car allowance taxable in Australia?

The taxation of car allowances depends on the process used and the allowance amount.

If you’re using mileage reimbursements, these reimbursements are non-taxable for up to 5,000km per year per car at or below the rate set by the ATO.

While companies can reimburse employees for distances above 5,000km, the amount reimbursed over 5,000km is not tax-deductible using the cents-per-km method. (It is tax-deductible if you use the actual cost or logbook method.)

Mileage reimbursements using the kilometre method are also considered tax-free for employees.

If you use a car allowance scheme, the car allowance is considered taxable income for both the employee and employer. Giving flat-rate car allowances is quite common, and a positive benefit for employees, but it’s not tax-deductible for employers. Employees, however, can still claim a tax deduction for business miles driven using the cents per km method.

If you use an actual costs reimbursement method, reimbursing employees based on a logbook of receipts for specific expenditures, your business can claim a tax deduction for any reimbursement you provide. In addition, these reimbursements are not considered taxable income for employees.

Frequently Asked Questions about mileage reimbursement

Still have more questions? We’re here to help.

How many kms can you claim for reimbursement without receipts?
As an employee, should I claim mileage deductions on my taxes if I drive for work?
As an employer, do I have to reimburse employees for mileage at the set ATO rate?
What vehicle expenses are tax deductible?

How can I make employee travel reimbursements easier?

Using an all-in-one travel management platform can help you manage all aspects of employee business travel, expense reimbursements, car rentals, and more. Whether you’re trying to reimburse employees for travel-related expenses, such as mileage, or booking international travel and accommodations for a major conference, TravelPerk is here to help you keep everything collected in one place.

ATO Cents Per KM: 2025 Car allowance guide