Cents per kilometre or logbook: which method claims more?

For 2026–27 the ATO's cents per kilometre rate is 91 cents, capped at 5,000 business kilometres per car — a maximum claim of $4,550. The logbook method has no cap: you apply a business-use percentage from 12 continuous weeks of records to your actual car costs. Above $4,550, only the logbook can capture it.

What actually separates the two methods?

Both methods answer the same question: how much of what your car costs you is business. They differ in how you prove it, and in how high the claim is allowed to go.

Cents per kilometre pays a flat rate for every business kilometre you travel. For the 2026–27 income year that rate is 91 cents. You can claim a maximum of 5,000 business kilometres per car, per year, and the rate is meant to cover everything — fuel, servicing, registration, insurance and decline in value. The ATO is explicit that you can’t add any of those on top of the rate.

The logbook method works from the other end. You keep records for at least 12 continuous weeks to establish a business-use percentage, then apply that percentage to your actual car expenses for the year. No cap on kilometres — but you need the receipts to back the expenses.

Who is allowed to use each method?

Your business structure decides this before any of the numbers do. Sole traders and partnerships — where at least one partner is an individual — can use either method, but only for a car.

The ATO defines a car for income tax as a motor vehicle, four-wheel drives included, designed to carry a load of less than one tonne and fewer than nine passengers. Anything outside that is an “other vehicle”.

• Company or trust — the actual cost method, regardless of the type of vehicle.
• Sole trader or partnership, claiming for a car — cents per kilometre or logbook.
• Sole trader or partnership, claiming for a motorcycle, van, or a ute rated at one tonne or more — the actual cost method.

That last line catches out more small fleets than any other rule here. A one-tonne dual cab is not a car for this purpose, so neither of the two methods in this article applies to it.

Where is the break-even point?

Start with the ceiling. Five thousand kilometres at 91 cents is $4,550 — that is the most the cents per kilometre method can return for one car in 2026–27, no matter how far it actually travels.

So the real question is whether the business share of your actual running costs beats $4,550. Two cars, same annual expenses, very different answers:

Car A does not travel far enough for the logbook to be worth the paperwork. Car B crosses the cap and leaves $850 on the table if it stays with the flat rate. The expense figures above are assumed for illustration — yours will differ, and the comparison is one to run with your accountant against your own numbers.

What has to be in a logbook for it to count?

This is where claims come unstuck. A logbook that is missing fields is not a partly valid logbook — the ATO’s position is that without a valid logbook you can’t use the method at all.

For the logbook period, the ATO requires you to record:

• when the period begins and ends, and the odometer readings at each end
• the total kilometres the car travelled during the period
• the business-use percentage for the period
• the make, model, engine capacity and registration number of the car

And for every single journey:

• the reason for the journey
• the start and end date
• the odometer readings at the start and end
• the kilometres travelled

Each journey has to be recorded at the end of it, or as soon as possible afterwards. A logbook reconstructed in June from memory does not meet that test.

The 12 weeks must be continuous and broadly representative of your travel across the year. Pick your quietest three months and the percentage it produces will not survive a look at the rest of your diary.

How long does a logbook last?

Five years. That is the part people miss when they decide 12 weeks is too much effort — it is 12 weeks once, then four more years of running on the percentage it established.

In each of those following four years you still need the odometer readings for the start and end of the period you owned the car, plus your business kilometres and use percentage for the year. And if your circumstances change enough that the logbook no longer represents your travel — new job sites, a move, a different type of work — you start a fresh 12 weeks.

Separately, records have to be kept for five years. For a logbook, that is five years after the end of the latest income year you relied on it.

What does the flat rate quietly leave out?

Depreciation is the big one. Under cents per kilometre it is baked into the 91 cents; under the logbook method you claim decline in value separately, which is usually where a recently bought vehicle makes the logbook worth the effort.

There is a ceiling there too. The car limit for 2026–27 is $69,883 — the most you can use as the cost of a car when working out depreciation. The same threshold caps the GST credit at one-eleventh of it, $6,353, which we covered in more detail in the car limit and GST on a work vehicle.

It is also worth knowing the rate has moved a fair bit, so a comparison you ran two years ago is out of date:

The 2026–27 rate is a base of 89 cents with a one-off uplift of 2 cents for that year only, so the jump from 88c is not a new baseline to plan around.

What changes when you run more than one vehicle?

The 5,000 kilometre cap is per car, not per business. Three eligible cars, three separate 5,000-kilometre allowances.

The logbook rules are stricter about this. If you use the logbook method for two or more cars, each car needs its own logbook and they must all cover the same period — you can’t run one ute in March and another in September and average them.

Mixed fleets end up on mixed methods. A sedan on the logbook, a one-tonne ute on actual costs, and a low-kilometre runabout on the flat rate is a perfectly ordinary outcome, and it is the reason per-vehicle records matter more than a single fuel card statement.

How do you keep 12 weeks of records without a paper book?

Electronic logbooks are accepted — the ATO points to the myDeductions tool in its own app, and a spreadsheet kept honestly is not disqualified either.

The practical problem is not the format, it is that the 12 weeks has to be captured as it happens. That is the gap an app-based logbook closes: trips get recorded at the time, per vehicle, with the purpose attached, and come out as a spreadsheet at the end. Axlerun records trips automatically by GPS on the free Drive plan — the first three vehicles are free forever — so the 12 weeks fills itself; the ATO logbook export to Excel or PDF is the step that sits on Cruise. Either way, check the export against the field list above before you hand it to anyone; you are responsible for the completeness of the record, not the software. There is a plan breakdown on the features page.

For one car doing 3,000 business kilometres a year, a diary is genuinely fine. The flat rate is the lower-admin option and it exists for a reason.

What to check before you lodge

• Whether your structure permits the method you have been using — companies and trusts can’t use either of these
• Whether the vehicle is a car under the ATO’s under-one-tonne, under-nine-passenger test
• Whether your logbook is still inside its five years, and still representative
• Whether the odometer readings for the year are recorded, not estimated after the fact
• Whether your five years of records are actually retrievable, not on a phone you replaced

Axlerun is software, not a tax agent. What is above is what the ATO publishes it requires — which method leaves you better off, and what you are entitled to claim, is a conversation for your accountant with your own figures in front of them.