Claiming Vehicle Expenses

Do you use your personal car for business?

Claiming Vehicle Expenses

Did you know that if you use your own car for business trips you can claim this as an deductible expense in your business.

There are 3 ways to do this:

  • IRD Mileage Rate
  • Logbook % use
  • Actual Costs

The IRD Mileage Rate

The IRD Mileage Rate is ideal for when you are only using your vehicle for business use occasionally. It is limited to 5000km per year. The current rate is 77c per km and applies to both petrol and diesel engines. Note: The IRD assesses and changes the rate each year. Please check for the current years rates.

Tracing mileage for vehicle expenses

For example:
Jamie runs a design business from home. She usually only sends digital files and works with clients via email and SKYPE. However, she has been asked by a local business to meet with them at their office to discuss re-branding options. She uses her car to get their and the trip is 25km each way.

25km x 2 (return trip) = 50km
50km x 77c = $38.50

Jamie can claim $38.50 motor vehicle expenses as a deduction in her business accounts.

Logbook % Use

You can also use a logbook to calculate the % business use. A logbook needs to be kept for 90 consecutive days. Using this you can work out the proportion of business and private use. A logbook only needs to be completed every three years (unless there is a large change in the proportion of private:business use (greater than 20%)).

You need to include the following in your logbook:

  • start and end dates of the 90 days
  • Vehicle odometer readings at the beginning and end
  • distance of each business journey
  • date of each business journey
  • reason for each business journey, and
  • any other detail that we may require.

Using the change in odometer readings and total km’s traveled for business you can calculate the % of business use you can claim. You can get a logbook from your local stationery store, or print out a template of your own, or there are a number of smartphone apps available as well.

For Example:
Jamie is doing more regular work with local businesses which requires her to use the car more often. She decides to keep a logbook and claim a percentage of all vehicle expenses.
Odometer Start: 120,026 km
Total Business km: 1,200 km
Odometer End: 129,566 km

129,566 – 120,026 = 9,540 km total
1,200/9,540 = 12.6%

Using the logbook you can claim a % of all vehicle running costs including:

  1. Petrol/Diesel
  2. Service & Maintenance Costs
  3. Tyre’s and associated costs
  4. Registration, Road Users, WOF costs
  5. Insurance Costs

You will need to keep copies of all receipts relating to vehicle expenses that you claim as for any other business expenses.

Actual Use

Can be used if you think your actual costs are higher than the IRD Mileage Rate. But if you use this method you need to keep accurate records of business and private expenses. Including reasons for and distances for business trips. I recommend using one of the other two methods if possible.

Make sure you claim your vehicle expenses

For More Information

If you need help with anything discussed in this post or have any accounting or bookkeeping questions please get in touch with us at or your own accountant or bookkeeper.

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