Car Expense Claims for Electric Vehicles

Claiming car expenses for electric vehicles (EVs) can be more complicated than for petrol cars – especially when using the logbook method. While fuel receipts are straightforward for petrol cars, calculating electricity usage for EVs requires more careful record-keeping and ATO-approved methods.

Let’s break down the rules for business car tax claims and how they apply to EVs and plug-in hybrids (PHEVs).

What Travel Qualifies as Business Use?

You can claim deductions for car costs when used for business purposes, including:

• Attending client meetings or work-related conferences
• Collecting supplies or delivering goods
• Travelling between two workplaces (e.g., for a second job)
• Driving from home or your main workplace to an alternative site (e.g., a client’s office)
• Itinerant work requiring travel to multiple sites in a day

🚫 Travel from home to your usual workplace is not deductible, unless you are transporting bulky equipment required for work.

The Cents per Kilometre Method

For many taxpayers, the simplest option is the ATO’s flat rate:

• 88 cents per kilometre (for 2025–26)
• Up to 5,000 business kilometres per year
• Maximum deduction = $4,400

This method covers all car costs (fuel, registration, insurance, depreciation, repairs). You can’t add extra expenses on top.

It applies equally to EVs, PHEVs, and petrol cars. To use it, you’ll need a travel diary or records showing how business kilometres were calculated, plus proof that you own or lease the car.

The Logbook Method

If your EV has a high percentage of business use, the logbook method may give you a bigger deduction.

Requirements:

• Keep a 12-week logbook showing trip destinations, purposes, odometer readings, and total kilometres.
• Logbook is valid for five years unless your usage pattern changes.
• Collect receipts/evidence for all car expenses, including registration, insurance, servicing, repairs, lease payments, and depreciation.

You then apply your business-use percentage from the logbook to your total costs.

Claiming Costs for Electric Vehicles

For EVs, expenses include both charging costs and standard running costs:

Commercial Charging

• Keep receipts for all charging station payments.

Home Charging

• Household electricity bills don’t separate EV charging costs.
• The ATO allows a standard home charging rate of 4.2 cents per kilometre.
• This rate applies to the total distance travelled, and if you use it, you cannot claim commercial charging separately.

If your EV records the proportion of home vs. commercial charging, you can:

1. Apply the 4.2 cents/km rate to home charging kilometres.
2. Add actual receipts for commercial charging.

✅ Keep electricity bills, odometer readings, and charging receipts as proof.

Plug-in Hybrids (PHEVs)

PHEVs are more complex since they use both petrol and electricity. The ATO has a seven-step formula for working out deductible costs, but here’s what you need to keep:

• Receipts for actual petrol and oil costs
• Opening and closing odometer readings
• The manufacturer’s Condition B test cycle fuel economy figure

Your accountant can then calculate your claim correctly under the ATO rules.

Key Takeaway

Claiming car expenses for electric vehicles and PHEVs is possible, but requires detailed records and choosing the right method.

• For low business kilometres, the cents per kilometre method is simple and effective.
• For high business use, the logbook method can give a bigger deduction – but involves more record-keeping.
• For EVs, the ATO’s 4.2 cents/km charging rate is often the easiest way to claim electricity costs.

📌 With the right documentation, you can maximise your deductions while staying compliant with ATO rules.

Tommy Li, CA

Director, Verity Advisory  |  Registered Tax Agent  |  Authorised Financial Adviser (ASIC Rep No. 1261831)  |  Member, Chartered Accountants Australia & New Zealand

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Tommy is a Chartered Accountant with 20+ years advising medical professionals on tax, financial structure and practice decisions. He founded Verity Advisory to provide integrated advice for doctors at career-defining financial inflection points — combining tax, lending and financial planning into a single structured approach.