The ATO has set a new rate of 85 cents per kilometre as the standard rate for claiming vehicle usage from 1 July 2020. 

This rate is useful for the following:

1. Reimbursement of motor vehicle expenses: this is a useful rate for employers to use to reimburse employees for using their own vehicle for business.  The ATO puts a great deal of work into determining these rates, so it is an impartial way to compensate employees. 
2. Car allowances: If employers reimburse employees for their car usage under this method, then there is no need to withhold pay-as-you-go-withholding (PAYGW) tax from the car allowance or reimbursement.
3. Personal tax return claims: where individual taxpayers claim the costs of using their personal vehicle for work using this method in the work-related expenses (WRE) section of their tax returns, this is the rate to be applied.

One of the best ways to work out the kms is by using a logbook app

Rates are reviewed regularly. The rate is:

• 85 cents per kilometre for 2023–24
• 78 cents per kilometre for 2022–23
• 72 cents per kilometre for 2020–21 and 2021–22
• 68 cents per kilometre for 2018–19 and 2019–20
• 66 cents per kilometre for 2017–18.

Read the full ATO update here - cents per kilometre

Disclaimer: This information is general in nature and is not an opinion expressed by us. So, before acting on this or any other information, it is important to seek professional advice related directly to you and your circumstances.  Should you require our assistance, contact your Primarius Team leader, or email us at info@primarius.net.au

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