Rising Petrol Prices? Here Are 5 Tax Deductions Many Australians Forget
Updated: Sep 29
With petrol prices rising again across Australia, many households and businesses are feeling the pressure at the bowser. Fuel costs affect more than just your weekly budget. They also increase the cost of commuting, running a business, and travelling for work.
While we cannot control fuel prices, many Australians do not realise that certain work-related travel expenses may be tax-deductible.
Understanding the rules around vehicle and travel deductions can help ensure you are not paying more tax than necessary.
Here are five tax deductions many Australians overlook.
1. Vehicle Logbook Method
If you use your personal vehicle for work-related travel, the logbook method may allow you to claim a percentage of your vehicle expenses.
This can include:
• petrol
• insurance
• registration
• servicing and repairs
• depreciation of the vehicle
You must keep a valid 12 week logbook that records work-related travel. The percentage of work use is then applied to your total vehicle expenses.
For people who travel frequently for work, this method can result in significantly larger deductions.
2. Cents Per Kilometre Method
If you do not keep a logbook, the ATO allows individuals to claim work-related car travel using the cents per kilometre method.
For the 2024 and 2025 financial year, the rate is 85 cents per kilometre.
You can claim up to 5,000 work-related kilometres per year, which means the maximum deduction could be up to $4,250.
This method is simpler but often produces a smaller deduction than the logbook method.
3. Work-Related Travel Between Locations
Many people believe they cannot claim any travel costs, but that is not always true.
Travel may be deductible when you travel:
• between two different workplaces
• from your main job to a second job
• to meet clients
However, travel between your home and your regular workplace is generally not deductible.
4. Home Office Deductions
With more Australians working from home, many people are reducing commuting costs but may not realise they can claim home office deductions instead.
The ATO allows taxpayers to claim a fixed rate per hour for working from home, which covers expenses such as:
• electricity
• internet
• phone usage
• computer equipment depreciation
This deduction can add up over the course of a year.
5. Business Vehicle Expenses
For business owners, vehicle costs may be deductible when the vehicle is used for business purposes.
This may include:
• deliveries
• visiting clients
• transporting tools or equipment
Proper record keeping is essential to ensure claims are compliant with ATO requirements.
Small Deductions Can Add Up
When fuel prices rise, every dollar matters. Many Australians miss legitimate deductions each year simply because they are unaware of what they can claim.
Understanding how travel and work related expenses apply to your situation can make a meaningful difference to your tax outcome.
If you are unsure what deductions apply to you, professional advice can help ensure you claim everything you are legally entitled to.
Need Help With Your Tax?
Dolman Bateman Chartered Accountants assists individuals, investors, and business owners across Australia with tax planning and compliance.
A quick review of your situation can often uncover deductions and strategies you may have overlooked.
Disclaimer: The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. All content relates to the current financial year only. Future changes to tax laws, thresholds or administrative requirements may affect the accuracy or relevance of this information, so you should always confirm that the guidance remains current. While every effort has been made to ensure accuracy at the time of publication, Dolman Bateman accepts no responsibility or liability for any loss or damage arising from reliance on this information. You should seek professional advice tailored to your circumstances before making any financial or tax decision.
