Can I claim GST on car expenses when using the cents/km method

 Author: TonyATO(Community Support)Community Support

27 Oct 2024

Hello @Liana2024

Yes! You absolutely can claim GST, but the methods are slightly different. Sole traders with travel less than 5,000 kilometres can use one of the following:

Formula method

• Determine the kilometres travelled for business, and
• the total kilometres travelled using
  • odometer readings 
  • service records, or
  • other reasonable basis.

Then work out the extent of the business use by dividing the estimate of business kilometres by the estimate of the total kilometres.

Set rate method

• 0 - 1,250 KMs travelled > claim 5%
• 1,251 - 2,500 KMs travelled > claim 10%
• 2,501 - 3,750 KMs travelled > claim 15%
• 3,751 - 5,000 KMs travelled > claim 20%

Logbook method

A logbook kept for business use for income tax purposes can also be used to work out the percentage of business use to claim GST credit. The:

• percentage of business use should be reduced if the logbook includes travel connected with
  • salary and wages
  • company directors
  • labour hire arrangements, or
  • input taxed supplies made
• logbook should cover a continuous period of 12 weeks. If the car has been held for less than 12 weeks, the logbook should cover the entire period the car was held
• percentage calculated using this method is valid for 5 years provided the use does not change.