Cents Per Kilometre: Sole Traders, 5,000 km, 88c Rate

Updated 17 October 2026 · General information · 2 min read

General information, not tax, legal or financial advice. We are not the ATO and are not a registered tax or BAS agent. Check ato.gov.au or ask an agent. Sources read on 17 October 2026. Dates and amounts after that are expected. Examples use made-up numbers. This page contains no affiliate links.

Short answer: The ATO says sole traders (and partnerships with at least one individual partner) claiming for a car can use the cents per kilometre method: a set rate per business kilometre, up to a maximum of 5,000 business kilometres per car per year. The rate covers registration, fuel, servicing, insurance and depreciation, so don't claim those separately.

Rates (ATO excerpts)

2024-25 and 2025-26: 88 cents per km (so up to $4,400: 5,000 x $0.88, our arithmetic).
2026-27: the ATO individuals page excerpt shows 91 cents per km; not yet confirmed on the business page (see below).

Evidence

You don't need written evidence of every kilometre or fuel receipts, but must be able to show how you worked out the business kilometres (for example diary records or the ATO app's myDeductions tool) and that you own the car (individuals page). Exclude private use such as school runs.

Over 5,000 km

For claims above 5,000 km you must use the logbook method for the entire claim (ATO small business page excerpt).

Timing

The 2025-26 year ended 30 June 2026; use the 2025-26 rate for the return you lodge now (when to lodge). The 2026-27 rate applies to the year to 30 June 2027.

FAQ

Utes and vans?

The ATO page we read covers cars; other vehicles use a different approach.

Two cars?

The limit is per car.

What we could not verify

The 2026-27 rate of 91 cents: only from a search excerpt of the individuals page; the business page's rate table was not readable.
Logbook method details; deductions for utes, vans and motorcycles.
Whether you can use it if the car is leased or on hire purchase for your structure (the page lists conditions we didn't read in full).

Sources

ATO, Cents per kilometre method (business) — https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/cents-per-kilometre-method (read 17 October 2026; page last updated 27 May 2026; the rates table did not render, rates from search excerpt)
ATO, Cents per kilometre method (individuals) and Tax Time: Small business, Motor vehicle expenses — search excerpts, 17 October 2026