How to maximise your work-related electric vehicle claim this tax time

Maximising your Work-Related Car Expenses Claim this Tax Time

A greater awareness of environmental impacts, coupled with surging fuel prices, has encouraged many individuals to consider purchasing electric vehicles (“EV”) or plug-in hybrid electric vehicles (“PHEV”).

The two methods allowed for either individuals or sole traders to claim work or business-related motor vehicle deductions respectively, are the logbook (operating cost) method and the cents per kilometre method.

Cents Per Kilometre Method

The cents per kilometre method:

  • uses a set rate for each kilometre travelled for business purposes
  • allows you to claim a maximum of 5,000 business kilometres per car, per year
  • does not require written evidence to show exactly how many kilometres you travelled
  • uses a rate that takes all your vehicle running expenses (including registration, fuel, repairs and maintenance and insurance) and depreciation into account

The set rate for each kilometre travelled for business purposes is reviewed regularly and has historically seen an increase once every two or three years.

The current ATO rate is set at 72 cents for 2021-22 and there is proposed legislation that this rate be increased to 75 cents from 1 July 2022, which loosely reflects the rising costs of living.

Logbook Method

Under the logbook method, you:

  • Keep a 12-week logbook, which is valid for a period of five years
  • Work out your business-use percentage by
    • dividing the distance travelled for business by the total distance travelled
    • then multiplying by 100
  • Add up your total car expenses for the income year (including registration, fuel, repairs and maintenance, insurance, interest expense and depreciation)
  • Multiply your total car expenses by your business-use percentage.

Electric and Plug-In Hybrid Vehicles

While determining car expenses for fuel-run motor vehicles can be measured relatively easily, calculating the operating costs for electric vehicles can be a bit trickier.

Given that Electric Vehicles are still yet to be widely adopted as business vehicles, given their price point, the ATO has yet to release major guidance on calculating the operating expenses for such vehicles, namely electricity costs.

Hence, from a practical perspective, the ability to apportion a power bill relating to the EV or PHEV use proves difficult and minimal from a deduction perspective.


Please feel free to reach out to Link Advisors this tax time, and we can have a chat to see how we can assist you to maximise your work-related car expenses claim for 2021-22 and future financial years.