ATO updates ‘cents per kilometre’ rate for individuals

The ATO has updated the cents per kilometre rate relating to individual car expenses for the 2023 income year to 78 cents per business kilometre.

The cents per kilometre method:

• uses a set rate for each kilometre travelled for business;
• allows taxpayers to claim a maximum of 5,000 business kilometres per car, per year;
• does not require written evidence to show exactly how many kilometres were travelled (but the ATO may ask taxpayers to show how they worked out their business kilometres, for example by means of diary records); and
• uses a rate that takes all vehicle running expenses (including registration, fuel, servicing, and insurance) and depreciation into account.

The cents per kilometre rate was 72 cents for the 2021- and 2022-income years.

This material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.