Vehicle expenses and logbooks for working holiday makers with an ABN

Can you claim vehicle expenses with an ABN?

Yes, if the vehicle is used for genuine business purposes:

Deductible business travel:

• Driving between multiple job locations on the same day
• Travelling to purchase equipment or supplies for your business
• Travel from your accommodation to a temporary work site (variable locations)
• Travel for business meetings or client visits
• Travel for training directly related to your business

Not deductible (personal travel):

• Daily commute from home to a single regular workplace
• Personal trips
• Travel for non-business purposes
• The "first and last" trip of the day to/from your main work base

The key distinction: business travel needs a genuine business purpose. Personal travel does not, even if you take it after work.

How does the cents-per-kilometre method work?

The simplest method for most working holiday makers:

• Set rate of 88 cents per kilometre (current ATO rate)
• Claim up to 5,000 km per year
• Maximum deduction: $4,400 per year (5,000 km × 88c)
• No detailed logbook required

To use this method, keep a simple record of your business trips:

• Date of each trip
• Estimated distance
• Purpose (e.g., "Drive to client site for installation")

This is the easiest method and works for most working holiday makers under an ABN doing occasional driving.

How does the logbook method work?

The logbook method gives a larger deduction if you drive a lot for business:

1. Keep a logbook for a continuous 12-week period
2. Record every trip (business and personal) during the 12 weeks
3. Calculate the business-use percentage
4. Apply that percentage to total vehicle expenses for the year

For each trip in the logbook, record:

• Date
• Starting and ending odometer readings
• Total kilometres
• Destination
• Purpose of the trip

After 12 weeks, you know your business-use percentage. That percentage applies to all vehicle expenses for the year:

• Fuel
• Insurance
• Registration
• Servicing and maintenance
• Repairs
• Depreciation

Example: 60% business use × $8,000 total vehicle costs = $4,800 deductible.

The logbook is valid for 5 years (or until your usage pattern changes significantly).

Which method should you use?

It depends on your situation:

• Drive less than 5,000 km/year for business → cents per kilometre
• Drive a lot for business and own the vehicle → logbook method
• Mixed personal/business use → logbook method often gives bigger deduction
• Lease or finance the vehicle → logbook method captures more costs

When we prepare your tax return, we calculate both methods and apply whichever gives the larger legitimate deduction.

What records do you need to keep?

For both methods, keep:

• Receipts for all vehicle expenses (fuel, insurance, servicing, registration)
• Logbook or trip records (depending on method)
• Odometer readings at the start and end of the financial year
• Vehicle purchase invoice (if you bought it during the year)

Keep records for 5 years from the date you lodge the return claiming the expenses.

A practical note for working holiday makers

Many backpackers buy a car to travel and work around Australia. If you have an ABN and use the car for business:

• Trips to ABN work sites are deductible business travel
• Personal travel (sightseeing, road trips) is not deductible
• Mixed use requires the logbook method to claim accurately

The Sydney-to-Cairns road trip is personal. The drive from your hostel to a farm for ABN work is business. Keep them separate in your records.

Get in touch with our team before lodging if you want help working out which method maximises your deduction. We do this for ABN holders every week.