Most people who lose a car deduction do not lose it because they drove less than they thought. They lose it because the record does not hold up: a purpose column that says “work” forty times, a period that runs eleven weeks, odometer readings reconstructed from memory in October.
This page sets out what the logbook method requires, field by field, with the ATO page linked on each point. It is the reference the rest of these guides hang off.
When you need a logbook at all
There are two ways to claim work-related car expenses as an individual: the cents per kilometre method, which needs no logbook and is capped, and the logbook method, which has no cap and needs one.
The logbook method works out your business-use percentage and applies it to what the car actually cost you to run: fuel, servicing, insurance, registration, interest, and decline in value. A car that costs $9,000 a year to run and is used 70% for work produces a $6,300 claim. There is no ceiling other than your real costs and your real percentage.
That is why the record matters so much. The percentage is the whole claim, and the logbook is the only evidence of it.
If you are not sure which method suits you, the method calculator compares both on your own numbers.
What every journey entry must record
For each journey in the logbook period, the ATO requires four things:
- the reason for the journey, meaning its purpose
- the destination
- the odometer reading at the start and at the end of the journey
- the total kilometres travelled
Source: ATO, logbook method.
Two of these are where records fail in practice.
“Reason for the journey” means the reason, not the category. “Work” is a category. “Site inspection, 14 Waratah St” is a reason. The distinction matters because the purpose is what establishes that the trip was deductible at all. A column of identical one-word entries proves nothing about any individual trip, and it is the first thing that looks reconstructed.
Odometer readings are readings, not arithmetic. Start and end readings for each journey are what tie your logbook to the physical car. If you record only the distance, there is nothing connecting the entry to the odometer chain, and a gap between one journey’s end reading and the next journey’s start reading is exactly the sort of thing that should be visible and explainable.
What the logbook period as a whole must record
Beyond the individual journeys, the logbook itself must include the odometer readings for the start and end of the logbook period and the total kilometres travelled during that period. Source: ATO, logbook method.
You will also end up with the work-related kilometres and the business-use percentage for the period. Those are outputs of the calculation below rather than separate fields the ATO asks the logbook to carry, but you need them at tax time and in each of the four later years, so record them with the rest.
Write it up as you go, not at tax time
This is the requirement with the sharpest teeth, and it is the one most often ignored. Each logbook entry must be made at the end of the journey, or as soon as possible afterwards.
A logbook assembled in October from calendar entries and fuel receipts is not a logbook that was kept. It may produce a number that is close to the truth, but it does not meet the requirement, and the fact that it was written after the fact is usually visible: readings that are suspiciously round, gaps that resolve too neatly, a purpose column with no texture in it.
This is the strongest practical argument for keeping the logbook on something you carry. Contemporaneous is a property of when the entry was made, and it cannot be added afterwards.
Twelve continuous weeks, and representative
The logbook must cover at least 12 continuous weeks, and the period must be broadly representative of your travel throughout the year.
Both halves of that carry weight. Twelve weeks is a floor, not a target, and continuity is a property of the period rather than of your driving. But representativeness is the one that decides whether the percentage survives: a twelve-week block chosen because it happened to be your busiest quarter is continuous, and it is still not representative.
The practical read is to start the period during a stretch of ordinary work, not during your peak and not while you are on leave. If your work genuinely varies by season, pick a period that sits somewhere near the middle of that range rather than at either end.
Continuity, interruptions, and what to do about leave are covered in does the 12 weeks have to be continuous.
How the business-use percentage is worked out
The ATO sets out the calculation in steps:
- Work out the total kilometres travelled during the logbook period, from the odometer readings at the start and end of the period.
- Work out the work-related kilometres travelled during the period, by adding up the journeys recorded as work-related.
- Divide the work-related kilometres by the total kilometres, then multiply by 100. That is your work-related use percentage.
- Add up your total car expenses for the period you are claiming.
- Multiply the percentage by those expenses. That is your deduction.
Source: ATO, logbook method.
Worked through
Say the logbook period runs from 3 August to 26 October, twelve weeks and a day. The odometer read 84,206 on the first morning and 89,412 on the last evening.
- Total kilometres: 89,412 − 84,206 = 5,206 km
- Work-related kilometres, added up from the journeys marked as work in the logbook: 3,354 km
- Business-use percentage: 3,354 ÷ 5,206 = 0.6442, so 64%
Car expenses for the income year come to $9,100. The claim is $9,100 × 64% = $5,824.
The 1,852 kilometres that were not work-related are private travel, and they belong in the total. Leaving them out inflates the percentage and breaks the tie between the logbook and the odometer, which is the one thing in the record that cannot be argued with.
Note step 1. Total kilometres comes from the odometer, not from adding up the trips you logged. If the two disagree, the difference is private travel that was not recorded, and the odometer is the one that is right. A logbook where the trips happen to sum exactly to the odometer difference is a logbook where nothing private was ever driven, which is rarely true and looks it.
One logbook per car
If you use more than one car for work, you need a logbook for each. The ATO’s requirement is that where logbooks are kept for two or more cars, they must cover the same period.
This catches people who change cars mid-year more often than people who run two cars at once. If you replace the car during the logbook period, you have not extended one logbook onto a new vehicle; you have a new car with its own odometer chain and its own record.
What the percentage is applied to
Car expenses for this purpose are the costs of running the car:
- fuel and oil, or electricity if the car is electric or hybrid
- repairs, servicing, maintenance and cleaning
- insurance
- registration
- interest on a car loan, but not the principal
- decline in value of the vehicle, which is where the purchase price eventually enters the calculation, subject to a cap called the car limit that applies when the car cost more than that limit in the year you bought it
Fuel and oil are the one line you can reasonably estimate, from odometer readings and average fuel costs, rather than keeping every receipt. Everything else needs written evidence.
Three costs sit outside this list and are worth naming, because each one gets claimed by mistake:
- Parking fees and tolls are not car expenses under this method. Where they are work-related they are claimed separately, and in full, not at your business-use percentage. The same is true under the cents per kilometre method.
- The purchase price of the car is not an expense. The decline in value is.
- Fines are never deductible, under any method.
You also need to actually own or lease the car. A car provided by an employer, or held under a novated lease or salary sacrifice arrangement, generally fails that test even though it feels like yours. See what counts as a car.
If you have no valid logbook
You are not entitled to a deduction under the logbook method. That is the whole answer, and it is worth being blunt about because the alternative belief (that a reasonable estimate will do) costs people real money.
What you may still have is the cents per kilometre method, which requires no logbook but is capped at 5,000 kilometres per car per income year and requires you to be able to show how you worked the kilometres out. For someone with high running costs and high work use, the gap between the two is usually thousands of dollars. The calculator shows the difference on your numbers.
Records you have to keep alongside it
The logbook proves the percentage. It does not prove the costs. You also need written evidence of the expenses you are applying the percentage to, and the $300 substantiation threshold that applies to some other work expenses does not apply to car expenses.
How long all of it has to be kept, and when the clock starts, is covered in how long to keep your logbook and receipts.
The short checklist
Per journey: reason, destination, start odometer, end odometer, kilometres, written up at the time.
Per period: start and end dates, start and end odometer readings, total kilometres, work kilometres, percentage.
Per year after that: odometer readings for the start and end of the period you held the car, plus your work kilometres and percentage. Details in what odometer readings you need.