Can My Boss Make Me Use My Own Car for Work? Reimbursement Rights

There's no law that says you must use your personal vehicle for work. But there's also no blanket law that says your employer can't ask you to. It comes down to what's in your employment contract, award, or enterprise agreement.

If your contract says you need a reliable vehicle and you agreed to that when you took the job, your employer can reasonably expect you to use it. Heaps of roles — sales reps, community workers, tradies, real estate agents — have this as a standard requirement. If it was in the job ad and your contract, you've agreed to it.

But if you were hired for an office-based role and your boss suddenly decides you need to start driving to client sites in your own car, that's a change to your employment conditions. You don't have to cop that without discussion, and you can push back.

The critical question isn't really "can they make me?" — it's "are they paying me properly for it?" Because if you're racking up kilometres for work, you should be compensated.

If you're using your own car for work, there are two main ways to handle the costs: reimbursement from your employer (either through your award or a company policy) and tax deductions you claim yourself.

The ATO sets a cents-per-kilometre rate that covers fuel, registration, insurance, depreciation, and maintenance. For the 2025-26 financial year, the rate is 91 cents per kilometre, up to a maximum of 5,000 business kilometres per year (for the simplified method).

Many awards also include motor vehicle allowances. For example, the Clerks — Private Sector Award has a vehicle allowance clause. The Social, Community, Home Care and Disability Services Industry Award includes specific rates for employees required to use their own vehicle. These award rates are minimums — your employer must pay at least this amount if the award covers you.

Check your specific award. If it includes a vehicle allowance or reimbursement rate, your employer is legally required to pay it when they ask you to use your car for work purposes. Failing to do so is a breach of the award — and that means it's a breach of the Fair Work Act.

This is the one that catches people out. Most standard car insurance policies don't cover you for business use. If you're using your personal car for work and you have an accident while doing work tasks, your insurer might refuse the claim.

Standard comprehensive and third-party insurance policies typically cover you for:

• Commuting to and from work
• Personal use

They often don't cover:

• Driving between work sites during the day
• Visiting clients or doing deliveries
• Carrying work equipment or goods
• Any driving that's primarily for business purposes

If your employer requires you to use your own car for work, you may need to upgrade your insurance to a business use policy — and that costs more. The question is: who pays for it?

Your award or contract might address this. If it doesn't, raise it with your employer. If they're requiring you to use your car for work, they should be covering (or at least contributing to) the additional insurance cost. And if you have an accident while driving for work purposes and your personal insurance won't cover it, your employer could be on the hook under vicarious liability — they directed you to drive, after all.

If your award includes a vehicle allowance and your employer isn't paying it, that's wage theft. Simple as that. Here's what to do:

Step 1: Check your award. Find the specific clause about motor vehicle allowances or reimbursement. Not every award has one, but many do. If yours does, that's your starting point.

Step 2: Raise it in writing. Send your employer an email: "I'm using my personal vehicle for work purposes as required. Under [Award Name], clause [X], I'm entitled to a motor vehicle allowance of [amount] per kilometre. I'd like to arrange reimbursement for the kilometres I've driven for work purposes." Attach a log of your work-related trips.

Step 3: Lodge a complaint. If they ignore you or refuse, contact the Fair Work Ombudsman on 13 13 94 or lodge an online complaint. Underpaying award entitlements is a contravention of the Fair Work Act, and the FWO can investigate and recover the money owed.

Step 4: Keep records. Log every work-related trip — date, destination, purpose, kilometres. You'll need this for any claim, whether it's against your employer or as a tax deduction. A simple spreadsheet works fine, or use an app like the ATO's myDeductions tool.

Even if your employer does reimburse you, you might still be able to claim additional deductions on your tax return. And if they don't reimburse you at all, tax deductions are how you get some of that money back.

The ATO gives you two methods:

Cents-per-kilometre method: Claim 91 cents per km (2025-26 rate) for up to 5,000 business kilometres per year. That's a maximum deduction of $4,550. You don't need written evidence of each trip, but you do need to be able to show how you calculated your business kilometres. This method is simpler but caps out at 5,000 km.

Logbook method: Keep a logbook for a continuous 12-week period, recording every trip (work and personal). This establishes your business-use percentage. You then apply that percentage to your actual car expenses — fuel, registration, insurance, depreciation, servicing, everything. No cap on kilometres. If your business use is high, this method usually gives a bigger deduction.

Which one is better? If you drive less than 5,000 km for work per year, the cents-per-km method is easier and often good enough. If you're doing serious kilometres — sales reps, community workers, anyone covering a large territory — the logbook method will almost certainly save you more.

Use our tax calculator to see how these deductions affect your take-home pay.

Let's wrap this up with the practical stuff you need to remember:

• Your employer can require you to use your own car if it's in your contract or award — but they should be compensating you for it
• Check your award for vehicle allowances. If there's a rate, your employer must pay it. Non-payment is a breach of the Fair Work Act
• Update your insurance if you're using your car for business. If your insurer finds out you've been using it for work without declaring it, they can void your policy
• Keep a log of work trips. Whether it's for claiming reimbursement from your employer or tax deductions from the ATO, records are everything
• You can't be forced to accept a new requirement to use your car if it wasn't part of your original employment conditions without proper consultation

If your employer is taking the piss — expecting you to rack up hundreds of kilometres a week in your own car with no reimbursement — don't just wear it. You've got rights, and the Fair Work Ombudsman is there to enforce them.