What Counts as Business Mileage in Australia? ATO Rules, Rates & Recordkeeping

Business mileage refers to kilometres travelled for work purposes using a personal or business vehicle. In Australia, claiming mileage is common for sole traders, employees, and company directors — but only legitimate travel counts, and proper logs are essential.

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What Qualifies as Business Mileage?

You can claim vehicle travel if it’s directly related to earning income, such as:

• Driving to client meetings or job sites
• Delivering goods or equipment
• Travel between multiple work locations
• Attending training, seminars, or networking events

You can’t claim:

• Travel from home to your regular workplace
• Trips for private or personal errands
• Travel by public transport or rideshare (that’s a different deduction)

ATO Methods to Claim Business Mileage

1. Cents-Per-Kilometre Method

• Up to 5,000 km per vehicle per year
• Use ATO’s standard rate (e.g., $0.85/km for 2024–25)
• No logbook required, but you must justify the kilometres

2. Logbook Method

• Keep a logbook for 12 continuous weeks
• Record all trips: purpose, start/end km, date
• Calculate % business use, then claim % of actual expenses:
  • Fuel, rego, insurance, servicing, depreciation, etc.

Business vs Personal Use

Type of Trip	Claimable?
Visiting clients or job sites	✅ Yes
Driving between two work locations	✅ Yes
Driving from home to office	❌ No
School drop-off during work trip	❌ No

Recordkeeping Requirements

The ATO requires:

• A written logbook (for logbook method)
• Odometer readings at start and end of the year
• Receipts for fuel, services, and car-related expenses
• A clear distinction between private and work travel

Apps like myDeductions, Driversnote, or TripLog can automate tracking.

How Ozobooks Helps

• Advises on the best method for your structure (employee vs sole trader vs company)
• Helps set up ATO-compliant logbooks
• Calculates accurate mileage claims and business use %
• Integrates vehicle tracking into your accounting system

FAQ

Q1: Can I claim mileage if I use a company vehicle?
No. Mileage claims are only for personally owned vehicles. Company car expenses are handled differently.

Q2: Is the cents-per-kilometre rate the same every year?
No. The ATO adjusts it annually. Always check the current rate before lodging.

Q3: Do I need a logbook every year?
No. A valid logbook is good for 5 years, as long as usage stays consistent.

Q4: Can I claim tolls and parking too?
Yes — those are separate deductions, even if you use the cents-per-kilometre method.