ATO updates ‘cents per kilometre’ rate for individuals.

The ATO has updated the cents per kilometre rate relating to individual car expenses for the 2023 income year to 78 cents per business kilometre.

The cents per kilometre method:

• uses a set rate for each kilometre travelled for business;

• allows taxpayers to claim a maximum of 5,000 business kilometres per car, per year;

• does not require written evidence to show exactly how many kilometres were travelled (but the ATO may ask taxpayers to show how they worked out their business kilometres, for example by means of diary records); and

• uses a rate that takes all vehicle running expenses (including registration, fuel, servicing and insurance) and depreciation into account.

The cents per kilometre rate was 72 cents for the 2020 and 2021 income years.

If you have any questions about how to calculate your work-related motor vehicle expenses or what records to keep, get in touch with us.