Can You Claim Fuel on Tax? ATO Rules for Work Travel (2026)

Let's get the bad news out of the way first: no, you cannot claim fuel for your regular commute to and from work. The ATO treats travel between your home and your regular workplace as private travel, and private travel expenses are not tax-deductible. Full stop.

This rule applies regardless of:

• How far you live from work (even if it's a 100km round trip)
• Whether you work odd hours or shifts (nights, weekends, early starts)
• Whether there's no public transport available in your area
• How expensive fuel has become (the fuel crisis doesn't change the rule)
• Whether you carry small work items like a laptop or lunchbox

The ATO's position is clear and has been tested extensively in court: your choice of where to live relative to your workplace is a personal one, and the cost of getting to work is a personal expense. This is one of the most commonly misunderstood tax rules in Australia, and it trips up thousands of taxpayers every year — especially during periods of high fuel prices when the temptation to claim is strongest.

However, there are three important exceptions where you can claim your home-to-work travel. If any of these apply to you, you may be entitled to a meaningful deduction.

The ATO recognises three situations where travel between home and work is considered work-related rather than private:

1. Your home is your base of employment

If you genuinely start and finish your work duties at home — not just checking emails, but substantive work — and then travel to other locations during the day, your home may be considered your base of employment. This commonly applies to:

• Visiting nurses and healthcare workers who receive their patient lists at home
• Sales representatives who work from a home office and visit clients
• Mobile tradespeople who pick up tools and materials from their home workshop

2. You need to transport bulky tools or equipment

If all of the following conditions are met, you can claim the trip:

• You use bulky tools or equipment for work (not just a laptop bag)
• There is no secure storage available at your workplace
• You need to transport the items by car because of their size or weight

Examples include a musician transporting a cello to an orchestra, or an electrician carrying heavy testing equipment. The ATO specifically states that a briefcase, laptop, or small toolbox does not qualify as "bulky."

3. You perform itinerant work

If your work is inherently itinerant — meaning you don't have a fixed workplace and travel is a fundamental part of your duties — you may claim travel from home to your first job and from your last job back home. This applies to:

• Construction workers who move between project sites
• Delivery drivers with no fixed depot
• Field service technicians covering a geographic area

If you're unsure whether you qualify under any of these exceptions, it's worth checking with a registered tax agent — the deduction can be substantial.

The cents per kilometre method is the simplest way to claim a car expense deduction for work-related travel. For the 2025-26 financial year, the ATO rate is 88 cents per kilometre.

Here's how it works:

• You can claim up to 5,000 business kilometres per year
• Maximum deduction: 5,000 × $0.88 = $4,400
• You do not need fuel receipts, logbooks, or odometer readings
• You do need to be able to demonstrate how you calculated the kilometres (e.g., a diary, roster, or list of work-related trips)
• The rate is a flat amount that covers all car expenses — fuel, rego, insurance, depreciation, servicing, and tyres. You cannot claim any of these separately on top

This method is ideal if you do a moderate amount of work-related driving (under 5,000km/year) and want a simple claim without paperwork. It's also useful if your actual per-kilometre costs are lower than 88 cents — for example, if you drive a fuel-efficient car.

Important: The 5,000km limit is for work-related travel only, not your total driving. Your daily commute does not count towards this limit (because it's not deductible). Only travel between workplaces, to clients, or other qualifying work travel counts.

The logbook method is more work to set up but can yield a significantly larger deduction if you do a lot of work-related driving. Here's what's involved:

Setting up your logbook:

• Keep a logbook for a continuous 12-week period that is representative of your normal travel patterns
• Record every trip during the 12 weeks — date, start/end odometer readings, kilometres travelled, purpose of trip (work or private)
• Calculate your work-use percentage from the logbook (e.g., if 60% of your driving was work-related, your work-use percentage is 60%)
• A valid logbook lasts for 5 years, as long as your travel patterns don't change significantly

Claiming your deduction:

• Apply your work-use percentage to all car running expenses for the full year: fuel, registration, insurance, loan interest, depreciation, servicing, tyres, tolls, parking (at work destinations, not your regular workplace)
• There is no kilometre cap — if you drive 30,000km for work, you claim the full amount
• You must keep receipts for all expenses you claim (or be able to obtain them)
• You need odometer readings at the start and end of the financial year

The logbook method tends to produce a larger deduction for people who drive more than about 5,000 work kilometres per year, or whose actual running costs per kilometre exceed 88 cents. It's particularly beneficial for workers with longer commutes who qualify under the three exceptions, or those with extensive client-visit travel.

Let's compare the two methods with a real-world example to help you decide.

Scenario: You're a sales representative who drives 8,000 work-related kilometres per year visiting clients. Your car costs $0.65/km in total running expenses (fuel, rego, insurance, depreciation, servicing combined). Your work-use percentage per your logbook is 55%.

Cents per kilometre method:

• Capped at 5,000km × $0.88 = $4,400 deduction
• You lose the deduction on the extra 3,000km of work travel

Logbook method:

• Total car expenses for the year: let's say $12,000 (fuel $4,800, rego $800, insurance $1,200, depreciation $3,500, servicing $1,200, tyres $500)
• Work-use percentage: 55%
• Deduction: $12,000 × 55% = $6,600 deduction

In this case, the logbook method gives you an extra $2,200 in deductions. At a marginal tax rate of 32.5%, that's an extra $715 back in your pocket at tax time.

When cents per km wins: If you do fewer than 5,000 work kilometres and your actual costs per km are under 88 cents (e.g., you drive a hybrid or small car), the cents method can actually give you a higher deduction with zero paperwork.

When logbook wins: High work kilometres (over 5,000km), expensive running costs (SUV, older car, premium fuel), or a high work-use percentage (70%+) all favour the logbook method. The 12-week setup effort pays off for years.

With fuel prices this high, some workers are switching to ride-sharing or exploring other transport options for work travel. Here are the tax rules for common alternatives:

Uber, taxi, and ride-share for work travel:

• Fares for travel between work locations (e.g., office to client site) are fully deductible
• Fares for travel to/from your regular workplace are NOT deductible (same rule as driving — it's private travel)
• Keep receipts or digital records (the Uber app receipt is sufficient)

Tolls:

• Tolls incurred on work-related travel (between work locations, to client sites) are deductible
• Tolls on your regular commute are NOT deductible
• If you use the logbook method, tolls are included in your total car expenses and the work-use percentage is applied
• If you use the cents per km method, tolls for work-related trips can be claimed separately on top of the per-km rate (they're not included in the 88c/km rate)

Parking:

• Parking at a client's location or alternate work site during work travel is deductible
• Parking at or near your regular workplace is NOT deductible — even if it's expensive CBD parking
• This is a common audit target, so make sure you only claim parking that genuinely relates to work travel away from your normal workplace

Here's exactly how to claim work-related car expenses on your 2025-26 tax return:

1. Gather your records

• Cents per km: A reasonable estimate of work-related kilometres with a basis for the calculation (diary entries, client visit logs, Google Maps distances)
• Logbook: Your 12-week logbook, start/end odometer readings for the financial year, and receipts for all car expenses

2. Choose your method

You can change methods each year — you're not locked in. Run the numbers both ways to see which gives you the better result. You can only use one method per car.

3. Lodge your return

• In myTax: Go to "Deductions" → "Work-related car expenses" → Select your method and enter the details
• With a tax agent: Provide your records and they'll calculate the optimal claim. Their fee is also tax-deductible the following year

4. Keep records for 5 years

The ATO can audit your return for up to 5 years (or longer in cases of fraud). Keep all receipts, logbooks, and supporting documents for at least this period. Digital copies are fine — use the ATO app's "myDeductions" tool to photograph receipts throughout the year so you're not scrambling at tax time.

Common mistakes to avoid:

• Claiming your regular commute (the #1 car expense audit adjustment)
• Claiming more than 5,000km on the cents per km method
• Using both methods for the same car in the same year
• Not having a logbook but claiming the logbook method
• Rounding up kilometres or inflating work-use percentages