ATO car depreciation limit explanation - should on-road costs be included in calculation?

 Author: RachelATO(Community Moderator)Community Moderator

1 June 2026

Hi @workbltd,

The $69,674 car limit for 2025–26 is the maximum cost you can use for depreciation. If you’re not registered for GST, the limit is GST-inclusive and applies to the total cost of the car, including GST and on-road costs (e.g. stamp duty, registration, dealer delivery).

If you’re registered for GST, you first remove the GST from the purchase price, then compare that amount to the GST‑exclusive car limit. You depreciate the lower amount. The GST credit is separate and capped at 1/11th of the car limit. This aligns with TD 2006/40, the cap is effectively applied on a GST‑exclusive basis.

On-road costs are included in the car’s cost for depreciation. The limit applies to the total cost of acquiring the car, not just the base price.

You’ll need to compare the total cost (including on-roads) to the car limit, and apply the cap based on your GST status.

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