Logbook vs Cents Per Kilometre

“I’m a sole trader and I use my car heavily for work. Should I bother with a logbook or just claim the cents per kilometre rate?”

Short answer: it depends on how far you drive and how much your car costs to run for the year. The ATO gives you two methods of claiming your expenses, each with its own pros and cons. Here’s how they work, with some examples.

The two methods in 60 seconds

Cents per kilometre – You get to claim a flat rate (for 2026–27 is 91 cents) for every business kilometre recorded. This is by far the easier method to use as theres very little admin overhead, but you’re capped at 5,000 business km per car.

Logbook – For this one you’ll require a logbook for atleast 12 continuous weeks that represents your typical driving and work out your business-use percentage. You’ll also need to keep track of actual annual car expenses like fuel, insurance, registration, vehicle depreciation, servicing (and the list goes on…). Sounds troublesome right? But the ceiling is much higher with this one as there is no kilometre cap.

Three worked examples

The low-mileage consultant

You drive 3,000 km for business. Total car expenses are $8,000 and your logbook shows 30% business use.

• Cents per km: 3,000 km × $0.91 = $2,730
• Logbook: 30% × $8,000 = $2,400

The cents per kilometre method wins by $330. For the odd site visit, this is the better path.

The travelling tradie

You rack up 8,000 business km. Annual car expenses are $12,000 and your logbook shows 60% business use.

• Cents per km: capped at 5,000 km × $0.91 = $4,550
• Logbook: 60% × $12,000 = $7,200

The logbook method puts an extra $2,650 in your pocket. Once you blow past that 5,000 km cap, the flat rate leaves serious money on the table.

The high-cost vehicle

You don’t drive far, but your car is expensive to run. Imagine 4,000 business km, $15,000 in annual expenses, and 50% business use.

• Cents per km: 4,000 km × $0.91 = $3,640
• Logbook: 50% × $15,000 = $7,500

Even at only 4,000 business kilometres, the logbook method nearly doubles your deduction. If you’re driving a newer ute or anything with hefty running costs, do the maths on both methods.

The rule of thumb

Under about 5,000 business kilometres with a cheapish car to run? The cents per kilometre method is a no-brainer. Less admin, and you’ll likely come out ahead.

Over 5,000 km, or running costs are high? The logbook method is almost always worth the paperwork. Yes, it’s a ball-ache for 12 weeks. But the tax savings usually dwarf the effort.

The catch: you need records either way

A word on logbook apps

You can track everything with pen and paper. But apps like LogMetric automate trip logging, calculate your business-use percentage, and keep your records tidy if the ATO ever asks. For sole traders who’d rather do paid work than paperwork, that’s a decent set-and-forget option.

Happy tax-time hunting!